LogMeIn Inc., one of Boston’s most prominent tech companies, got its start in, of all places, Budapest. How’d that happen? Cofounder and chief executive Michael Simon talked to Hiawatha Bray about his love for Hungary, his fondness for giving his company’s services away — sometimes, and LogMeIn’s plans for a world in which practically everything is online.
1Simon went to Hungary after the fall of the Iron Curtain, not long after earning a graduate degree in business from Washington University in St. Louis.
I graduated from business school in 1992, and they sent 72 new MBAs into central Europe to help with the transformation. It’s been 22 years and I still have one foot in Hungary. I was relatively young, didn’t have a family. I was single, and it just seemed like the greatest opportunity in the world.
In Budapest he found a post-Communist city full of entrepreneurial opportunities. Over the next decade, he launched two technology startups in Hungary.
A guidebook described it as a “tree-lined cafe city that is known as the Paris of the East.” Well, that sounds good, and so I went. What I didn’t know until I got there is it’s really a great tech hub. It’s not like Silicon Valley or here, but it’s probably like an Austin, Texas. There’s a lot of great software companies there.
When he and partner Marton Anka launched LogMeIn in 2003, the company shocked the industry by giving away free access to the service, which let users remotely control their computers. But they knew what they were doing.
Even though you have 19 free users for every paid user, if you could have a good service delivery platform so it didn’t cost you too much to maintain the free users, you would ultimately use their word of mouth to help lower customer acquisition costs for the paid ones. And it’s worked well for us.
Simon has always enjoyed the occasional risk, and not just in business.
Yes, I did jump off bridges into rivers and quarries and things like that. One of the great joys of living in this part of the world is that you’re an hour-and-a-half drive away from really nice skiing.
And a new thing for me, and I’m not very good but I really like doing it, is surfing. I’ve had a chance now to go surfing three times, and its something I feel has a bright future for me.
Still, all good things must end, including the free version of LogMeIn. That’s because users prefer two other of the company’s free products — online meeting service JoinMe and online storage provider Cubby.
In the last two years, 75 percent of our new free users were actually going to JoinMe and Cubby. Basically, our users went and we followed them.
Growing worries about online privacy haven’t been an issue for LogMeIn.
We don’t get any pushback on that. But there’s a big difference between ourselves and, like, Google and Facebook. If you use our products, you own your data. We don’t have access to it, we don’t see it, we’re not mining it.
Simon wants to use LogMeIn’s global networking expertise to hook up practically everything to the Internet — home appliances, cars, and countless other devices used in everyday life.
The number of things connected to the Internet is growing exponentially. There’s this notion of the Internet of Things. We’re really right smack dab in the middle of that. We’re one of the few companies in the world that literally at any point in time has tens and tens of millions of devices that we’re servicing as we sit here. So we think we have a lot of really genuinely unique expertise in how you actually make these things work.Hiawatha Bray can be reached at email@example.com.