In anticipation of Avast’s thirtieth anniversary, we sat down with our founders, Pavel Baudiš and Eduard (Eda) Kučera to talk about Avast’s history and its future. The two men met in a world marked by its profound lack of freedom, and together navigated changing political, social, and technological circumstances to build the Avast we know today — a company that makes it possible for hundreds of millions of people to enjoy true freedom online. In the course of a few hours, we heard their take on writing the precursor to the Avast antivirus, creating their own company in the wake of the Velvet Revolution, becoming a serious player in the global antivirus market, and going all-in on the freemium business model, without which there would be no free Avast security today.
Computers or toys?
When Pavel and Eda met in Communist Czechoslovakia, there was no such thing as “computer science.” There was, however, the Research Institute for Mathematical Machines, where both men worked in 1988. Together, Eda and Pavel worked on exploring the budding technology of computers and wrote operating systems for communist machines — though at the time, as Eda was quick to point out, “‘computers’ and ‘technology’ were a very…capitalist science’.”
“In those days it was really difficult to get anything from the western countries, like technology, because there was an embargo about such stuff,” Eda explained. “So, we received some computers, and were told to make software and an OS… It was difficult.”
For the most part, the institute was working on software for large computers, and people weren’t particularly interested in the personal computers that were starting to emerge in the West. One day, an Olivetti M24 personal computer, small enough to fit on a desk, arrived. It was the first PC in the institute, and although it was novel technology, most researchers dismissed it as a plaything.
“They got this PC and nobody wanted to deal with it because it was a ‘toy’. So it ended up on my desk,” said Pavel. “And I had a lot of time to play with it. I was learning and studying what it could do, and the assembly language to program it.” Looking back, it was the perfect period of preparation — but that’s jumping ahead.
“The base of Avast”
In May 1988, a colleague returned from abroad with a floppy disk, which he gave to Pavel. On it was the infamous Vienna virus. It wasn’t the only virus around at that time, but it was still rare, and it gave him an unfathomable opportunity to conquer and study it; not because he had any grandiose notions of saving the world, but simply because it was interesting, “like a toy, a learning tool.” Over the next few days, Pavel disassembled it, analyzing what it did, fascinated by how it was able to spread.
Although it was six or seven months before Pavel was able to catch another virus, by that time he had already begun thinking about writing a program that would stop viruses infecting PCs. “I came up with a general program antivirus which would check the integrity of the whole system to see if something had changed.” We held our breaths. Pavel has a way of understating things, so his next remark was delivered quietly and matter-of-factly.
“So, this was the base of Avast.”
The conclusion, as if answering our thoughts, hung in the air with the weight of its importance — but Pavel was quick to move on. Seeing an opportunity to refine the antivirus program that Pavel had written, he and Eda found new jobs at a small organization called Zenitcentrum, where they had greater access to PCs (Commodore C64 computers) and a little more independence to concentrate on their new project. After a short time, however, they decided to pursue their new venture in earnest, and joined with other entrepreneurially minded people to establish the Alwil cooperative in November 1989. A cooperative was the only kind of business venture allowed at the time, but it did enable Pavel and Eda to begin selling their antivirus: the AntiVirus Advanced SeT (AVAST), comprised of many utilities, which gave the company its name. (It’s a happy accident that the word also means “stop.”) They found modest success in selling their antivirus and other software, mostly to government organizations.
“Then, of course, with the revolution, everything changed.”
A world of pretend
To say that everything changed is, of course, an understatement. As children, our founders had fairly normal ambitions: Pavel wanted to be everything from a garbage man to an astronaut, while Eda imagined becoming a chef. But their world was not one we would recognize today. Remembering Communist Czechoslovakia, and trying to describe it in the most precise of terms, Eda admitted with brutal honesty that it was all pretend. The leaders promised a world of equality, but delivered a world where people merely pretended to work and pretended to get paid. There was no real freedom to choose your career, to speak your mind, to be ambitious, to experiment with who or what you wanted to be, and both men felt these restrictions heavily in their own lives.
We listened intently as Eda described a world in which the secret police gathered information on people’s whereabouts, beliefs, and possessions, leaving almost no part of private life untouched. “This is what makes us so sensitive about the topics of security and privacy,” he added. Immediately, it brought to mind today’s online world, where people give away their privacy in exchange for shares, likes, and convenience, and often are unaware of this fact.
But the point is that today we have a choice: Avast exists to give people this very freedom. And yet, before the Velvet Revolution, such a future seemed out of reach. Even by November 1989, when the Berlin wall had already come down, and Poland and Hungary had both won their freedom from their Communist leaders, and the USSR was starting to fall apart — few Czechs imagined their world would change just as quickly. Still, Eda and Pavel were among those thousands who jangled their keys in protest, going routinely to Wenceslas square to take part in the massive protests.
And then, almost as suddenly as it started, it was over. By the end of 1989, Communism had lost its grip on the country. As people celebrated their newfound freedom and the country began to reorganize for a new era, Pavel and Eda seized the possibilities for Alwil. Eda remembered making the first calculations, “I tried to collect information on how many licenses we would be able to sell and the unit price, and how we could make money, and I subtracted the rent for the office space and the facilities and I got huge numbers as the result. I guess you could say this was the first version of our business plan.”
But the huge numbers weren’t the only thing propelling them toward running their own business. Their desires were touchingly human. “To do what we liked to do, when we wanted to do it. That was the most important point.” They split off from the rest of the Alwil cooperative to focus exclusively on antivirus software. In the spring of 1991, they established both Alwil Trade and Alwil Software, s.r.o., to distribute and create their product, on floppy disks, no less.
Let’s make a deal
By the mid-90s, the antivirus market was already crowded with Alwil, Grisoft – the maker of AVG, established in Brno in 1991 – and ESET, a Slovakian company also operating in the Czech Republic. Most countries at that time had only one local antivirus provider, but even with the stiff competition, Alwil was nonetheless thriving. In 1995, Ondrej Vlcek, now our CTO and EVP of Consumer, joined the company, co-authoring Alwil’s first antivirus for Windows 95. Around 1994, Alwil had started submitting their Avast antivirus for testing every half year, something which was being done by all the well-known players.
“Alwil was the very first company to receive 100/100/100 for everything in a Virus Bulletin test,” Eda noted with pride. That was in mid-1996, and the accomplishment didn’t go unnoticed. Soon, one of the biggest players in the US antivirus market was calling.
“In December of 1996, somebody from McAfee called.”
Eda described the first overtures with bemusement. At the time, McAfee was the biggest name in cybersecurity. They had established a strong foothold following public hysteria over the Michelangelo virus. They had both a competitive position in the US consumer antivirus market and were largely responsible for providing cybersecurity solutions to the US military. They had everything going for them, except one small problem: their antivirus was weak at the time.
So, as Eda recounted, they asked “If it would be possible to visit us. So we agreed. ‘Why not?’… We understood that they would like to acquire us.” At the time, Alwil had no freemium model and no extensive global distribution. The market was local and largely limited to “selling the product to corporations and government institutions and local businesses.”
The hunch that McAfee wanted to purchase the company was correct, but the offer itself was underwhelming. Not wanting to give up their business nor their freedom, and sensing an opening in another direction, Alwil proposed a different deal. Eda remembers, “We offered that Avast could license its engine to McAfee. They refused immediately at first…But after two weeks they decided that they would accept our offer.”
Beginning in 1997, the Avast engine powered McAfee’s antivirus. Eventually, McAfee acquired another company in order to be able to build their own antivirus in-house. But the cooperation gave Alwil two important returns: financial stability and a greater understanding of what would be possible if they tapped into a global market.
If you give it away, will they pay?
By the mid-to-late 90s, competition in the AV marketplace was steadily increasing while viruses were running rampant. Macro viruses were wreaking havoc on Windows systems, and as technology became more complex it became more difficult to secure. Big US players, like Symantec, were entering smaller countries, like the Czech Republic, and attempting to dominate the market.
“In the start, after the year 2000, it seemed that it would be difficult to continue because the sales in the Czech Republic were down and the cost of development was growing,” Eda says. Recalling Alwil’s situation as Y2K approached, he shook his head, “We had a pillow of money from McAfee, but were in the red for two to three years, and were really bankrupt.” Pavel smiled at the memory. “We needed to do something dramatic to stay in business.” Luckily, they were willing to take a risk. And so they did.
In 2001, Eda and Pavel decided to make every version of their basic AV protection free, “in the hope that someone would decide to pay us.” This change of business model was a considerable risk, although one that had been attempted before. In 2000, AVG had started offering a free version of their basic protection, but only in English, and only for the US and UK markets. It had served them well enough there, but people in other regions were, as Eda said, angry that they still had to pay. Learning from that lesson and taking a huge risk, they decided to go global without any money on their account, as Eda remembers. And then, they waited. And waited.
“We opened our first e-shop and it took some time,” Pavel recalled. “After nine days, there were still no sales. We became quite nervous.” Thankfully, day 10 brought the breaking point — the day of the first sale. Soon, there would be more. However, it would still be a while before their bold move would prove its merits. “The first million users took 30 months,” Pavel hesitated briefly, but then perked up. “Then in two more years, there were over 20 million users.” And just one year after that, in an explosive period of growth, the user base doubled to 40 million — at a time when Avast still only had 38 employees (quite the workload). This surge in growth continued beyond what they could have hoped.
More relevant than ever
Undoubtedly, the move to freemium not only saved the business, but was part of reshaping the industry — and today, continues to shape our entire online world. For we must defend against the dangers that lurk in connected living. Dangers that only grow more numerous as hackers make communities on the darknet, technologies evolve, and ordinary people are left unprotected and unaware, not knowing what they share and who sees it. With technology advancing at breakneck speeds, criminals and legally-operating bodies have more and more opportunities to erode the freedom that once formed the bedrock of the open internet.
This means that we, both Avast and people around the world, have more and more responsibility to prevent that from happening. But does everyone understand this the way we, in the security industry bubble, do? Unfortunately not. And maybe they can’t see it as clearly as Eda and Pavel, who have lived in a world without these values. The only difference between then and now, perhaps, being the visibility of the effects of crime and intrusions into our privacy. We don’t see tracking cookies, convenient apps, or open Wi-Fi as threatening as the secret police.
“People don’t seem to care!” Eduard exasperatedly proclaimed at the end of a passionate analysis of the slow decay of privacy, sharing a sentiment once described by Edward Snowden: “Saying you don’t care about privacy because you have nothing to hide is like saying you don’t care about freedom of speech because you have nothing to say.”
The issue of privacy — and by extension, freedom — seemed to weigh heavy on the founder’s minds, and for good reason. It seems a day doesn’t go by when a new technology is patented or a law is passed that can put our liberties at risk. As Pavel pointed out not long after Eda said his piece: “Privacy is the most important part of freedom. And yet, every day, it seems to continue to dissolve.”
So what’s next?
Our mission is to create a world that provides security and privacy for all, no matter who you are, where you are, or how you connect. And even though the ways we’re combating crime and prying eyes may be different than they were 30 years ago — the basic tenets of what we’re fighting for remain the same: securing our freedom, and that of everyone who lives their life online.
We’ve been doing it for thirty years. And like our founders, we know that our success doesn’t mean we can sit back and relax. In fact, now is the time to be vigilant, and make sure that we stay one step ahead of the bad guys, and never ever become complacent about the things that really matter: our safety, our families, and our freedom.