In September 2022, I shared that Adobe announced it was acquiring Figma for $20 billion. Adobe is publicly traded and has a market capitalization (i.e., valuation) of around $270 billion as of this writing. It’s an established company offering software, including Photoshop, to creatives. Figma was founded around 2011 and offers web-based tools that allow creatives to design and prototype user interfaces and user experiences collaboratively and easily.

Today it was reported that the merger has been called off because Adobe couldn’t get regulatory approval. Adobe will reportedly pay Figma a $1 billion termination fee for walking away from the deal.

Figma’s CEO confirmed the news via a blog post in which he also noted that the company has been executing since the deal was announced. It even hired 500 new people.

This news is bound to be a letdown for Figma team members and investors, who expected a large liquidity event this year. However, this might not be all bad for Figma. For one thing, market conditions have changed materially since this deal was announced. The NASDAQ Composite Index was at about ~11,000 then (on September 22, 2022). The index's 2022 bottom was ~10,200. As of this writing, it’s at ~14,900, or ~35% higher since the announcement of the merger. Another consideration is that if the 500 new hires are an indication of revenue growth, the company could be doing well financially. Last, Figma gets $1 billion for the headache of the last fifteen months, which isn’t bad considering it was valued at $10 billion in its last fundraising round in 2021.

This isn’t the outcome Figma hoped for, but it probably isn’t that bad for them. It could even turn out to be a good outcome. Time will tell. I’m curious to see what 2024 has in store for Figma.

Yesterday I shared my thoughts on Jeff Bezos embracing wandering. In the video I referred to, Bezos talked about something else that I’ve been thinking about: cost reduction.

To Bezos, cost reduction means inventing a better way of doing existing work. When you invest in a better way, you make doing that work less expensive, which makes the world richer. He used the example of the plow. The invention of plowing made farming less expensive and more efficient, which made the world richer (by making food more plentiful and less expensive).

Space flight, Bezos said, is a solved problem, and he’s focused on dramatically reducing its cost.

It’s interesting that Bezos arguably has built a trillion-dollar company (Amazon.com) by focusing on cost reduction and could build another massive company with Blue Origin by turning the same focus onto a different industry.

If you want to check out this section of the interview, look here.

This weekend, I listened to an interview that Jeff Bezos, founder of Amazon.com and Blue Origin, recently gave. I haven’t found many long-form Bezos interviews, so I was interested in hearing what he had to say in this one, which lasted over two hours.

Bezos discussed many topics, but one thing he mentioned multiple times stuck out to me. Bezos is a big fan of wandering.

His thinking is that solving a problem by inventing a new solution means you don’t know where you’re going. New solutions are different than incremental improvement, and there is no linear path to new solutions like there is to incremental improvements. The solution isn’t clear, and you’re working to find it through all sorts of unexpected twists and turns. The process is often seems inefficient, but that’s how new solutions are invented.  

Bezos went on to say that he likes messy meetings accompanied by a crisp document outlining the problem to solve because messy meetings allow for the wandering that results in the invention of new solutions.

Bezos also shared a fun fact: when he wakes up in the morning, he isn’t as productive as people think. He first wanders a bit by drinking coffee, talking with others, reading the news, etc.

The interview with Bezos was interesting, and I had a few great takeaways. If you’d like to watch the full interview, go here. For his thoughts on wandering, go here, here, and here.

This is my one-hundred-ninety-fourth weekly reflection. Here are my takeaways from this week:

• Shopify – Chatting with the Shopify CEO this week was amazing. His focus on helping people achieve independence through entrepreneurship stuck with me. Entrepreneurship is a force for economic mobility, and there’s a big opportunity to build products that help other entrepreneurs succeed.
• Events – I met some impressive people at events in Atlanta this week. I want to be more thoughtful in 2024 about attending interesting non-tech events.
• Countdown – There are two calendar weeks left in 2023. With essentially one business week left, everyone’s making a mad dash to get anything still open wrapped up.

Week one hundred ninety-four was another week of learning. Looking forward to next week!

I recently met with an idea-stage entrepreneur. He’s built an MVP of his solution and is thinking about ways to scale the solution. At his early stage, he’s testing and tinkering a surprising amount.

During our conversation, I realized he’s clear on the solution but hasn’t crystallized the problem he’s solving. This means he’s not sure who his customers are, either. His solution addresses a few potential problems, and he’s considering a wide variety of businesses as potential customers. He’s holding his solution tight and the problem it solves loosely.

This is the classic solution-in-search-of-a-problem approach that some idea-stage entrepreneurs unwittingly take. This approach has landed this entrepreneur in a gray area where he’s unsure what steps to take next.

At the idea stage there isn’t much to undo, so there’s a simple remedy for being in a gray area. Simply flip the approach. Let go of the solution and zero in on a specific problem. Said differently, hold a problem tight and be flexible on the solution that solves it.

I suggested that this founder consider pausing work on his solution and doing discovery of potential customer groups about the problems he thinks his solution could solve. I suggested he read The Mom Test and follow the customer discovery methodology outlined in the book to identify the specific problem he wants to solve and develop a deep understanding of it. Hopefully, that will put him in a position to build a great solution that solves a painful problem customers will happily pay for—and keep him out of the gray area he’s in now.

Last year, Money magazine ranked Atlanta as the best place to live in the U.S. in 2022. At the time, I shared my thoughts on Atlanta transitioning to a tier-one major metropolitan city. I believed the ranking showed that word was getting out. I wrote:

I’ve been a believer for many years that Atlanta is where the puck is headed. Most people don’t realize how great the city is. I’ve long believed that when word got out about the city’s greatness, it would go from being a metro city to what I call a tier-one major metro. That transition would put the city in a different stratosphere and able to compete as a destination with other tier-one major metros. I think of tier-one major metros as cities that are known outside the US as the undisputed capitals of their regions. Think New York City for the Northeast, Chicago for the Midwest, Los Angeles for the West. The Southeast has a few great cities, but not an undisputed capital, especially when you ask people outside the country.

Money came out with its “50 Best Places to Live in U.S. for 2023” list, and Atlanta has once again topped the list. My favorite lines from this year’s writeup:

Atlanta is big on culture, in every sense of the word. In years past, it helped catalyze the Civil Rights Movement, and was a nucleus of some of the most popular hip hop, R&B and country music we still listen to today. These days, our No. 1 place to live is nothing short of a cultural behemoth.

Atlanta is a place that people don’t want to just pass through temporarily. They want to plant roots and call it home because it offers the opportunity to pursue professional excellence, an amazing quality of life, and a diverse culture. This rare combination, along with numerous other positives, makes Atlanta unique and desirable. It also helps make a strong case for Atlanta to be the “capital” of the Southeast.

Congrats to the city for topping this list two years in a row. I’m happy others are recognizing what we’ve always known.

For Money’s full list of 2023’s best places to live, see here. For Money’s 2023 writeup on Atlanta, see here.

I recently had the chance to meet Tobi Lütke, CEO and cofounder of Shopify. Shopify’s platform provides technology that allows retailers to easily sell online. Said differently, it makes e-commerce easy. Tobi initially built Shopify to solve a personal pain point but soon realized that other entrepreneurs were experiencing the same problem. In 2004, he embarked on solving the problem for others, and as of the writing of this post, Shopify is a publicly traded company with a market capitalization (i.e., valuation) of just under $100 billion.

Last fiscal year, Shopify recorded $5.6 billion in annual revenue. The Shopify platform processed almost $200 billion in gross merchandise value (GMV); i.e., revenue on behalf of its customers. Tobi has built a company that’s having a large impact on how commerce is done.

Tobi is one of those rare founders with the ability to take a company from idea to billions. I was interested in learning what trait allowed him to achieve such a rare feat. Tobi shared a variety of valuable insights, but what stuck with me most was his conviction about the power of entrepreneurship. Tobi believes entrepreneurship is a powerful force that can change the lives of those who pursue it. He’s expressing that belief through Shopify’s mission of helping people achieve economic independence by making it easier to start, run, and grow a business. And his belief and mission-oriented mindset have likely been a significant driving factor in his ability to continuously level himself up as Shopify has grown from an idea to an international company generating billions of dollars in annual revenue.

I’m glad I had the opportunity to meet Tobi, and I look forward to following his entrepreneurial journey. I can’t wait to see where he takes Shopify next and the impact it has on entrepreneurship.

At a recent event, I met an entrepreneur in the real estate space. I love learning about company origin stories, so I asked for his. He said that after the Global Financial Crisis, his financial services career was uncertain because no Wall Street banks were hiring. In fact, many were firing employees and trying to stay afloat. He used his relationships with his previous banking customers and his curiosity to learn about a real estate problem that others were unaware of. He researched the space for over two years and then launched his company.

I love his story because it demonstrates how focus, creativity, and drive can help entrepreneurs do their best work, even in the worst of circumstances.

You may have heard this proverb:

If you give a man a fish, you feed him for a day. If you teach a man to fish, you feed him for a lifetime.

This makes sense to me. Sometimes people ask for your help with a problem, but they really want you to solve it for them. If you do, you’ve satisfied their immediate need but not set them up for future success. You’ve just taught them to call you whenever they encounter that problem.

I don’t believe in leaving people hanging when they ask for your help. Instead, I believe in supporting them. I won’t solve the problem for them, but I’ll be there to help them think and navigate through the problem. I make it a point to not lead; instead, to follow their direction. I try to support, nudge, and encourage along the way. When the problem is solved, they’ve solved it—I haven’t. The process of figuring out the solution sticks with them, and they can comfortably solve problems like it in the future on their own. And you’ve helped them become more confident. When someone succeeds in doing something they thought was impossible, they become surer of themselves and their abilities. They start to look at other problems not as insurmountable but as puzzles they can solve if they focus and put forth the effort.

I’m not sure who wrote this proverb, but it’s spot on. I prefer to teach someone how to fish.

Today I read an article about the dispute between Warren Buffett and the Haslam family over Berkshire Hathaway’s purchase of the Haslam family’s prize asset, Pilot Travel Centers. The dispute has led to a lawsuit. Pilot is a truck stop operator with over 860 locations operating under the Pilot Flying J and One9 Dealer brands.

Since 2017, Berkshire has gradually purchased 80% of Pilot for $11 billion. During an annual 60-day window, the Haslam family can opt to sell their 20% remaining stake to Berkshire. The contractually agreed-upon price would be 10 times the prior year’s earnings before interest and taxes (EBIT). Note that EBIT differs from EBITDA. EBITDA is earnings before interest, taxes, depreciation, and amortization.

The lawsuit centers on what financial reporting method should be used to calculate EBIT and thus determine the purchase price should the Haslams elect to sell the remaining 20%. The issue is pushdown accounting, a method that has an impact on the value of assets a company owns, which impacts the depreciation and amortization expenses, which impacts reported profitability (in this case, EBIT). The Wall Street Journal reported that the decision to use pushdown accounting can have as much as a $1.2 billion impact on the price Berkshire would pay for the remaining 20% of Pilot. I assume the Haslams want to use the method that determines a higher EBIT and Berkshire and Buffett want to use the method that determines a lower EBIT.

There’s more to this case that I won’t get into, but I find it interesting that this dispute isn’t about the company's operations. It’s about how the results of its operations are recorded in financial statements and how the method used could have a $1 billion-plus impact.

Accounting isn’t fun, but it’s the language of business. This case reinforces my thoughts about it being important for entrepreneurs to learn basic accounting concepts.