The Demise of LayerVault and the Market for Creative Tools

Layer Vault Logo

No sooner had I written in yesterday’s post that “I firmly believe that we’re in a golden age for design software” than LayerVault, the version control service for designers, announced that it’s shutting down in April. In a note posted to the site yesterday, CEO Kelly Sutton said:

Some folks may be wondering: Why? We will try to share our experience as best we can via post-mortems and blog posts, but the short answer is simple: we failed to make LayerVault financially viable, exhausted our existing capital reserves, and were unable to secure additional capital to sustain uninterrupted service. We ran out of money. Although the service will cease, we’re still hopeful that the technology may find a home.

I got to know Sutton a little bit last year and found him to be thoughtful and engaging. When I heard the news, I asked him over email if he could offer any comments. He was understandably reticent, as the company is in the process of liquidating its assets, but he did offer this.

We bit off more than we could chew. We built some good technology that explored new ideas, but failed to make a business out of it. We’ll do our best to share the lessons we’ve learned in the coming weeks and months.

It’s an unfortunate final chapter for one of my favorite startups. LayerVault was building a high-growth business predicated on the design industry. The very thought of a venture capital-scale enterprise focused on the problems that designers face every day was exciting. Adobe had done that before, obviously, but their success was rooted in a different age. I was rooting for LayerVault to be a designer’s GitHub or Dropbox, a multi-billion dollar startup that would turn into a major new brand.

That said, I have to admit that I wasn’t a LayerVault user myself. I tried on several occasions to adopt it, both for independent projects and for the work we’re doing at Wildcard. Though I found it beautiful and slickly made, it seemed to favor a workflow that wasn’t comfortable for me. It would be a disservice to describe it as more of an agency tool than a product development tool, but unfortunately that is what I heard from lots of people.

Still, none of that takes away from what the LayerVault team managed to build. By all accounts, they had lots of happy customers who used the service avidly—they just didn’t get enough of them to scale at the rate that was necessary for a venture-backed company to survive. It was a very good run nevertheless, and the team should be proud of its accomplishment.

LayerVault’s demise doesn’t shake my belief in this “golden age for design software” either. The circumstances practically demand this ongoing explosion in new products and tools: we now have a proliferation of once highly proprietary technology (today you can practically build your own Photoshop from open sources libraries); incredibly efficient, streamlined distribution (both direct channels and app stores); and a very sophisticated customer base that is practically empowered to solve the thorniest of its own problems.

From Framer to InVision to Affinity Designer to Marvel and of course Sketch, there is clearly a plethora of incredibly interesting, vibrant new players in this space. This market is so robust at the moment that even Adobe, who not long ago was effectively the only game in town, is now thoroughly motivated to work at perhaps its most innovative pace ever. (Full disclosure: I’m collaborating with Adobe on the forthcoming Project LayUp.)

And soon there will be a new player with a new take on version control for designers, too, informed at least in some small part by LayerVault’s legacy. I have no idea who they will be or what form the product will take, nor whether they will be venture-funded or bootstrapped, but I’m confident that this space is only going to get more interesting for the foreseeable future.


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