Despite our many attempts to organize unique and memorable passwords, many of us are still using the same thinly-veiled dictionary words for all of our accounts. You’re welcome, hackers. Who knew a little string of letters and numbers could be so hard to manage? In 2020, nearly half of all Americans said they would not use a password manager. Reducing our reliance on homegrown passwords is going to require a lot of work. LogMeIn decided spinning off LastPass, its freemium password manager, into its own company is the best way to do this. And the best way to earn more users.
“The password problem has actually gotten worse through the pandemic because more people are online than ever,” LogMeIn CEO Bill Wagner told Protocol. “We need to make investments that increase the pace of innovation.”
LogMeIn, a SaaS tools company, has too many products to list. Creating a dedicated, standalone LastPass company will help drive focus, Wagner said. LogMeIn announced the news Tuesday, and plans to begin the separation process in earnest in January. It hopes to announce a new CEO in the first quarter and build out the workforce throughout the year. Wagner can’t talk specifics for competitive reasons, but promised “noticeable new features.” Some focus areas include stronger customer service, more integrations for businesses and better tech all around (it plans to double the number of engineers next year).
Launched in 2008, LastPass is popular, frequently at the top of “best password manager” lists. The tool boasts more than 30 million individual users and 85,000 businesses. But the company has received flack for limiting its free users to one device in March, and for hiking the premium plan’s price with little warning two years in a row. The complaints were reminiscent of those leveled at LogMeIn back in 2015 after its $125 million acquisition of LastPass. Wagner said separating LastPass has nothing to do with this initial backlash. “I would not say it was designed to separate from the LogMeIn name,” he said. “I think it was more about giving LastPass the chance to focus and be an independent market leader.”
Referencing the February frustrations, Wagner said LastPass’ customers aren’t afraid to relay their feedback, and that customer reviews have since improved. “Some of the features that our free users wanted are our premium features, or they wanted features that we didn’t yet offer and needed to invest in to deliver,” Wagner said. “Our feedback was that they were willing to pay for it.” LastPass premium features include dark web monitoring, emergency account access options and a security dashboard monitoring weak passwords.
Wagner acknowledged that some free users left the service, though millions remain. The number of people who converted to premium surpassed the company’s expectations. “Those customers were telling us they want more functionality; we want to make more investments to give them functionality,” he said.
There are no plans to change pricing as of now. Wagner said he doesn’t see pricing as a “real leverage” as the password manager market is competitive enough to keep services around the same price point. Most password managers hover around $3 per month for a personal plan and $5 per month for a family plan, according to Investopedia.
LastPass has a double-barrel focus on the enterprise and consumers. Most of its users are individuals, but most of its revenue comes from large companies. “If you don't have a great user experience, then those users don't bring you into the company,” Wagner said. He hopes pivoting LastPass into its own company will allow a greater focus on each.
As for eliminating the password? Wagner said people still confess to him that they use the same password for everything (tip: Don’t tell people that, folks). The number one priority is getting people and companies to break their habits, even if they hate LastPass with a passion. “LastPass is great, I believe in it, I love it,” Wagner said. “But the most important thing is to use a password manager.”
