This week on The Vergecast interview series, The Verge editor-in-chief Nilay Patel speaks to current CEO of Logitech Bracken Darrell.

Logitech has acquired a couple of companies over the past few years, notably Blue Microphones and Ultimate Ears. Recently, Logitech bought Streamlabs, a streaming software company used by almost half of all streamers on platforms like Twitch and YouTube.

Nilay and Bracken talk about how acquiring this software company makes sense for Logitech, its own hardware that works with Streamlabs, and what it’s like making hardware for big companies like Apple, Microsoft, and Google.

Note: We called up Bracken a week after we recorded our initial interview to follow up on news of Logitech buying Streamlabs. We edited that part in around 10 minutes into the show, so the audio changes slightly for a few minutes. Apologies for that, but below is a lightly edited excerpt of that part of the conversation.

Nilay Patel: So you just bought a company called Streamlabs. I think it’s [for] $89 million. It’s a big investment. What attracts you to Streamlabs?

Bracken Darrell: Well, you know we love this world of the democratization of content creation. There was a period when I was growing up when NBC and Disney and all these other big companies beam things through your living room right into your eyes. They control the content. You were the viewer. Today, content is created by billions of people and it’s getting bigger and bigger all the time. And so this is an area that we think with Blue microphones (like the one sitting in front of me), our webcams (like the one sitting in front of me), our keyboards and our mice — we belong in this space. We’ve been pulled into the space by people who are creating that content. And now we’re going one step further and Streamlabs was really the leading player in enabling especially gamers who wanted to stream to make money doing it or at least have fun doing it. And so it’s a great fit for what we’re up to.

So that really connects right to a platform like Twitch. You’ve got the setup, you’ve got all the hardware, you’ve got the gaming PC, you’ve got the microphone, the headset, the camera, now you’ve got the software solution. The next piece of it is obviously there’s Twitch, which is owned by Amazon. I doubt they will sell it to you, like you can’t integrate into that part of the stack. How are you thinking about the future of you owning this part of the stack, but that the distribution side seems very different.

The answer is to us, this may feel like a leap to you, but it feels really the same to us. You know, our mice for example connect to iOS, they connect to the Microsoft operating system, they connect to the Google Android operating system. So we’ve always been in this business of really supporting these large players and supporting their platforms and really trying to enable their platforms to do more. So we looked at Streamlabs and we thought, “Gosh, this is another great example of that.” They’re basically 45 percent of the people who are going onto Twitch. And the primary way Twitch makes money is through advertising. And what they want is they want more people creating content that people come to watch on there. So what they’re basically doing is creating something that’s supporting the platform of Twitch. And of course, they can also support all the other platforms including YouTube. We really like that space. We feel like it’s kind of comfortably at home for us although it’s not hardware. It’s comfortable at home for us in terms of really supporting multiple platforms. And it really works.

You’ve got this ecosystem of hardware that Logitech makes. Now you’ve got a software product that’s important to a lot of them. This feels like this could be an integrated offering. Could you sell it as a kit? Is that stuff going to get more integrated? Are you going to get more out of the Blue microphone if you run Streamlabs? Are you getting more out of the gaming peripherals if you use one of your headsets? Do you see that kind of value building out of having it all?

Well, you know, it’s possible, but I think the more likely path for us is we want Streamlabs to be successful in its own right. And so to be successful in its own right, it needs to work really well with everything. Whether it’s a competitor to us in our microphone business or headphone business, whatever brands you believe in, you love, you feel like you’re part of, we want you to really come into Streamlabs and have an amazing experience, so I don’t want to disobey it. I would never want to disadvantage some other brand’s product portfolio. But if there are things we could do that would make the experience better, we’ll certainly try to go after them, but I hope that if we do that, we’ll also try to make them better for everything.

And then the other kind of big piece of it is you’re not attached to every PC in the world, so you could still grow. But the overall PC market is changing a lot. Microsoft just announced a bunch of new PCs, one of which runs Android. The other one runs an ARM processor. The shape of PCs is obviously changing. Are you saying there’s enough people streaming games on a PC that want this setup, that want the Twitch experience, that you can accelerate into that even as the broader PC market is changing?

You know, we’ve been in this broader PC market changing since 2008. It went from the PC market grew and grew and grew and grew and then it suddenly went flat, and then it started to decline. And then iPads were suddenly going to be huge and then that kind of slowed down, and then those all go mobile. And then that sort of is happening, but it doesn’t seem to interact. And then the PC will stabilize and it’s kind of growing again.

Our view of the world is, you know, we’ve got lots of things to do for people who want to interact with things that are sitting in the cloud. Most of what we’re talking about is actually not sitting on a PC or on someone’s phone, it’s actually happening at the cloud. It’s somewhere in servers where millions of people can access, it can be updated all the time, and there’s lots of capacity and lots of new things to do. So our general view of the world is all the hardware including what is a PC, will keep changing just like they’ve been changing since 1976 or ‘75.

What we’re going to do is try to enable and be a cloud peripherals company, whether it’s hardware — or in the case of Streamlabs, a service or software — that enables you to have a great experience and I think that will just always be changing. But we’ll have lots of opportunities underneath that.

So walk me through some mechanics of an acquisition like Streamlabs. How did it come together?

Well, we’ve worked with everybody who does things like Streamlabs does and so we’ve kind of been working with those companies for the last few years. We worked a lot directly with Streamlabs. We really like the team. We love the two founders that we got to know. We thought they were just super smart, great people and we were impressed by what they’ve been able to do.

And so as we got to know them, we’re always looking at things we could be doing beyond the categories we’re in. It generated a discussion that started between me and Ujesh Desai who runs gaming [at Logitech]. And then I brought in the head of M&A. It makes it sound like a really big company, our M&A department is three people. And so it started this discussion with us, and then we said, “Could this work?” And then we talked to Ali [Moiz] about it and he said, “You know, we don’t really want to sell, but if we did want to sell to anybody, it would be to someone like you — where you really leave us alone to be our own business inside a business, where you can clear the decks and enable us not to have to raise more money all the time and maybe give us advantages we couldn’t have another way.”

So that’s really how it went down. And then you get into the discussion around how much do you pay and all that stuff. And that’s always the steps that naturally M&A goes through. But I’d say that was it. And it started with culturally, “Does this look like a pretty good fit?”

How many folks do they have?

They have about 90 people there. They’re in both San Francisco and Vancouver.

And they’re going to stay put in their offices?

Absolutely.

From a consumer’s perspective, what changes should you see as short, medium, and long term?

Well, I hope you don’t see anything short term because we think what they’re doing is great. They’ve got a really cool road map that we believe in, and we’re going to support it financially and with any expertise we could bring to the table.

For medium and long term, I think it remains to be seen. You know they’re a startup that is growing rapidly and pivoting and moving in a couple of different directions. So I think you will naturally see Streamlabs do more things, but I wouldn’t relate that directly to us. I think we’re about really trying to be part of this ecosystem of making the gaming and the streaming experience better and better, and available to more and more people in a super easy way.

So I don’t have anything specific to say except that I think they were doing great stuff and I hope we’ll do a lot of great stuff together in the future.

You mentioned supporting the road map financially. Often the larger company comes by and buys the startup and says, “We’re just going to fund your road map, we’re just going to go for it. You can go a lot faster than you were before.” Was that one of the promises you made or you think they are operating at the right speed?

Actually, they were really well funded. I mean, I said it, not you. But the thing was they had a whole bunch of cash sitting there in their bank waiting for them to do what they needed to do.

[Laughs]

So they really didn’t need us. I mean they really did it because they said, “You know what, we’re thinking long term and we like the way you guys are thinking. And you’re really interested in enabling streamers to at least have a lot of fun and for it to be easy and maybe to make money and make a living doing it.” So we both had a very similar point of view on this.

I think that was probably more important than the funding of the road map. But I do think when you stretch it out longer, if you’re in a startup that does need money, certainly we want to make sure that they’re well funded, and especially people running the business aren’t out there trying to raise money all the time.

I have met with probably thousands and thousands of founders, and it just breaks my heart most of the time when I realized that these founders have this huge passion for their business — like in their case, streaming or broadcasting. And then you realize, actually, they’re spending 60 percent of their time talking to venture capitalists and angels and trying to sell their story, and 20 percent of their time really doing what they love. And the other 20 percent is administrating the business in ways that maybe we can help. So hopefully this will get them to 80 or 100 percent of the time doing what they’re really excited about and love.

With a software business, you don’t have inventory on a shelf. This is your first software business. It’s an expansion for you — maybe not conceptually — but it’s certainly an expansion, a different ecosystem and different economy. How are you thinking about, “Okay, we can change the way we operate now that we’re shipping software not hardware”?

Well, the most important thing that we need to be doing is learning because Ali and his brother, these two guys have a lot more to teach us than we have to teach them. So we’re going into this with our eyes wide open trying to make sure we learn. I keep looking on the shelf side to see Streamlabs and it’s not there.

We’re here to learn and they’ve got a lot to teach us. And we’re going to look more and more like this across all sorts of business. We have launched software-only products, you know, Logitech capture, which is an editing software for things like what we’re doing right now: video creation and content creation. So we’re increasingly getting into that space and I think we’ve got a lot to learn from them, and no inventory to carry, which we like.

Is there more software in your future?

Yeah, I don’t know the exact numbers, but we’re probably hiring software engineers two to one over hardware engineers now. We still love hardware, but we’re doing a lot of software and increasingly, we’ll be doing services. So yeah, there’s a lot more software in our future.

But like consumer software products like Streamlabs, not software to support the hardware?

Yes, exactly. Not just firmware, I mean real software. And in our B2B business, we’re in the video conferencing equipment business there, but we’re doing a lot of software there, too. We’re writing software now where an IT department can actually track all the devices in all the rooms that they have and kind of know what usage looks like. And we’ve got AI built into those, that’s somewhere between firmware and traditional software. We’re doing more and more, and you’ll see a lot more software from us in our future over the next decade.