How can a 'humble' tech company innovate? Logitech's CEO explains

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Logitech is a rare technology company. It's been around for 35 years, all the while finding different ways to thrive as an independent accessory maker. But despite being a well-known brand, it's never been considered "hip" like Apple or Beats. Instead of betting big on showy new products, Logitech has always focused on finding successful niches where it can build a small, but loyal following. And according to the company's CEO, Bracken Darrell, he wouldn't have it any other way. At SXSW last week, I sat down with Darrell to chat about the road ahead for Logitech.

Where is Logitech now and where is it going?

When I look around, I see that everything will be reinvented. It may take 20 years, but there won't be a single thing in this room that isn't connected. In that world, it's so cool because the really large companies can't do everything, nor would they want to. It leaves room for people like us to go into small ponds where we can be a big fish. We're never going to try to compete with the big guys in anything that's meaningful to them. But we can go into a lot of little places.

There are so many opportunities. We have a lot technologies, great acoustics, far-field mics, video sensors. And we're building out our software capabilities, so we can offer something where we should.

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Are we going to see more products like the Circle camera relying on connected software?

I always say, we want to be capable of doing it, but we don't need to do it. We'll do it where it makes sense, where the business model requires it. But in general we're perfectly happy letting cloud companies fulfill their mission and enable them through hardware. We're also willing to jump up into the cloud and create our own service when we need to. I think the key is flexibility.

Logitech has always been known as more of an accessory company. Since tech is expanding now, does that mean there are now more areas for you to conquer?

The analogy that I always use is, if you watched us during our heyday, during the peak of the growth curve that happened between 1997 and 1998 to 2008, the platform was growing, and that was the PC. We had mice and keyboards, and we were gaining share during that period. We had different ways to grow: The platform grew, we were adding new categories like speakers and cameras, but the total mix was really exciting.

What's happening now is that the PC has kind of flatlined, so now we peripheralize cloud-based services. Let's take streaming music: If you took the growth of Bluetooth speakers and looked at where streaming music was going, they overlapped completely. So we offer a peripheral [the UE wireless speakers] that lets you bring that music anywhere you want and play it with people. We're doing the same thing in gaming. In video conferencing, we're not really creating point to point video conferencing, but we're creating peripherals that lets anyone join the party in the cloud.

That's the future for us. It's about making good choices and being ready for mistakes and failures.

Logitech's also known for its hardware, is your focus on that changing moving forward?

I would say we have changed. We now have someone in charge of software engineering in every business, more than firmware. The Circle camera is probably the best example, where we're actually doing machine learning. Do I think we need to be a machine learning expert company? I don't. I think we ought to be able to do it where we need to do it, and have very strong capabilities when we're doing it. Usually, we're going to be offering an experience at the very end, and that's our game.

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I've noticed a couple categories like Bluetooth speakers where Logitech has taken a lead. How does Logitech approach new markets?

We're really not dominant in anything. We're kind of humble about everything. We have a few moments of greatness. When we go into a category, we try to design it from a consumer experience out. So, for example, with Bluetooth speakers, the reason that product did well was because we really started with thinking, "How are people going to use this?"

We saw that people would cut the cord with a Bluetooth speaker and that was it, it would just sit in the middle of a table. That was great because it was wireless, but I don't think it was the logical extreme of what you had. What happens? When you go out and listen to music in the wild, you tend to go to places with tables, and it's usually not just two people. It sits in the middle of the table and everyone wants to feel like part of the party, so you're worried about where to turn it. So we made it circular, which was hard in the beginning, but now other people [like Amazon with the Echo] have followed us.

And then we said, we know people are going to take it into places where it's going to get wet, so we made it waterproof. We made it super sturdy so you can practically drop it out of a building without taking damage. And a lot of other people's speakers were really fragile. The other thing we did was say, when you're buying a portable speaker today it's different from what it was in your home, because you're using it with your phone. So it should have an app where we can constantly upgrade it. So we made it so that you can connect two speakers in stereo, now you can connect around 200 more and play as many as you want. And we just kept updating it.

What are you looking at in terms of upcoming categories? VR seems like it'll need a lot of accessories.

We're not really sure what we're going to do next. But VR and AR, we're doing a lot of work in there. I don't know when we're going to launch something, it may not be anytime soon. We certainly are interested in it, though, and we're doing a lot of experimentation to try and understand how VR is likely unfold and what accessories will be around it, who the players are. It's a really exciting place.

With the way Microsoft has opened up Windows Holographic, lots of PC companies will be making VR headsets. I could see a Windows Holographic Logitech headset at some point.

We're open to everything. And we like anything that really feels like it can enhance the experience right at the end. We'll do other things, but that really feels like home. It's way too early for me to talk much about it.

It seems more companies want to build up their hardware expertise these days. Is Logitech fiercely independent at this point, or would you ever consider joining another company?

We have no desire to be bought, nor would I say it would never happen. At the end of the day, I don't really even think in those terms. We're just trying to create amazing experiences, and if we do that we've accomplished our goals. And we want to do it consistently over time, and have an engine that builds the capability to do that. I don't know what that means from an ownership standpoint. We've always been happy being independent.

Which of your products are you most excited about right now?

That's like asking me which of my children are my favorite! I'm really excited about all of them. I love gaming; it's so fun and dynamic, and it feels a little like the beginning of the NBA or NFL ... Have you seen Spotlight? [Logitech's new presentation remote.] I just love that product. The cool thing is that it's one of the ways we've really thought through it. It's really an attempt to make someone more relaxed and confident when they speak. It's about making you feel like, "Wow, I'm going to kill this presentation."

You've made acquisitions like Ultimate Ears. How do you decide when to buy another company versus building something yourselves?

You know it's really simple. We're always working on sprints. We're working on three to 12 things at a time, all the time, that are not things we're in. I view acquisitions completely as a way to accelerate something we're doing, or differentiate within it. You won't see us just buy something. Anything we've bought, we're already working on. We just bought Jaybird [makers of wireless headphones]. We love that space.

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What attracts Logitech to the audio market? Most consumers generally don't pay that much attention to their audio these days.

Now I won't be humble for a minute: We have such great acoustic capabilities. We have a lot of people at the company who are bleeding music. They're so into it. And then we also have the technology capabilities. It'd be a shame if we couldn't take advantage of that. It's obviously a hot space now, the key is finding our little niche in it. We don't want to go taking on everyone big.

We do headphones for gaming -- that's a great business -- and we do them for sports. It kind of inspires you to get out there, they're helmet ready. Jaybird was originally built in the mountains, it was for people who were really into outdoor sports. And then we're doing the custom earphone business.

It's funny you're so focused on niches, Beats came out of nowhere to make people into expensive headphones. Why isn't Logitech playing in that space?

I think Jimmy Iovine and all of the people who worked at Beats did an amazing job building that brand. They did such a marketing job that you can't help but be in awe of it. We admire that. We're building our marketing capability. We're not bad, but we could be better.

If you place us in that timeframe [when Beats was getting started], you could see we were making different choices. I think what Jimmy Iovine had that we didn't was access to celebrities, at an incredible cost. He was sitting in a chair and he is so respected, he's such a leader, and he was a magnet for that talent. I met him once and told him, "Wow what you and Dr. Dre did has never been done before."

This interview has been edited and condensed for clarity.

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