minuteKEY: Revolutionizing the Key Industry
Founded in 2008, minuteKEY has rapidly transformed the key-cutting industry. minuteKEY combines robotics and software engineering to provide consumers the first self-service key duplication kiosk. Each machine is highly accurate and user-friendly, ensuring each customer walks away satisfied and with a working key duplicate. In 2014, Inc. Magazine ranked minuteKEY 11 on the annual Inc. 5000 list for growing privately held companies. We recently spoke with Chris Lohmann, Senior Vice President of Sales and Marketing, about minuteKEY’s unique perspective as a middle market company.
Tell us a little about minuteKEY. How did the company get its start?
minuteKEY was the result of two brothers, Ari and Dani Freeman’s frustration surrounding the hassle of getting keys cut. There was typically a high degree of miscuts in manual key cutting: 10-15% of the time, the keys don’t work. Because of the high return rate and being a low-ticket item the brothers knew stores didn’t like to cut keys. However, due to the high volume of keys being cut, most retailers felt the need to provide the service. As a solution, Ari and Dani came up with the idea to automate the process through a kiosk. After seven years of developing the technology, the brothers brought in current CEO Randall Fagundo. Fagundo’s previous experience in the kiosk industry, selling his business to Coinstar and as a senior executive at Coinstar made him a great fit. The new team began doing several pilots with different retailers. The first major pilot consisted of putting kiosks in 50 Lowe’s stores. Lowe’s was very receptive and loved that they were able to free up the labor previously occupied by the manual key desk.
minuteKEY is now in 1,000 Lowe’s stores has 1,500 kiosks in Walmart and has totally replaced manual key cutting in Menard’s stores. Pilots in other hardware channels and even grocery channels have also proven successful.
Does minuteKEY have a large global market and are you trying to expand into other countries?
Right now minuteKEY is only expanding into Canada. We get international requests frequently, but before we go into other countries we need to focus on our current demand in the U.S.A.
As a middle market company, what would you say is your largest obstacle right now?
Probably the biggest obstacle, since we own the machines and they’re fairly expensive, is the cost of capital.
What’s special about the technology in the kiosks?
How the kiosk is serviced is pretty cool. Any time something happens in the machine, it sends a ticket to our technical service organization. 90% of the time they can fix the problem remotely, saving a lot of time and money. The machine has an uptime of over 99%. There are very few kiosks that have that high of uptime.
We noticed that minuteKEY recently implemented a new VIP program. Have you noticed a significant benefit to your company with this offering?
It’s pretty amazing. Within less than two months we have over 15,000 members and the average order size of a member is 50% higher than non-VIP members. The best part is once you log into the kiosk it recognizes who you are and all the coupons and discounts are integrated. It greets you by name, and you can see how many keys you’ve cut or your current status. It’s really the first integration for a self-service kiosk that links an online loyalty program into the kiosk experience.
For a lot of today’s potential talent pool, company culture has a huge influence on their decision of where they want to work. What does minuteKEY have to offer prospective employees?
We’re located in Boulder, CO, and enjoy a pretty casual environment. We do a lot of activities together which makes us a very close-knit group. I would say not only do we work together, but we’re friends, so we play together. There’s a trust that exists at minuteKEY that isn’t at a lot of larger companies. If someone’s going out for a run, nobody’s wondering if they finished their work. Everyone trusts that everyone’s going to do his or her job, do it well, and do what it takes to get it done.
How does minuteKEY retain its talent?
I think a lot of it is cultural. It’s also just a really fast-paced environment. We’re growing so quickly and we’re dealing with some of the world’s largest companies: Walmart, Lowe’s, Menards, Albertsons-Safeway. These companies provide challenges but certainly keep things interesting. We’re consistently continuing to innovate and do things better, so I think there’s a fast-paced culture of change and improvement that people enjoy.
What do you see as the next steps for minuteKEY?
minuteKEY is the only kiosk in Lowe’s and Menards stores, so we think our footprint will allow us to expand into other self-service automation solutions. We don’t really envision minuteKEY as a key company; we envision it as an automated solution company.
What advice would you give to other middle market companies that are still struggling to establish themselves as much as minuteKEY has in the market?
I think there is two things middle market companies need to keep in mind. First, the product has to provide a better experience and better value. Second, finding a product that actually sells a solution is the most important. For minuteKEY, we have a solution that actually improves the experience both for the customer and the retailer. That’s where you get a real win-win. We brought fun into a category that really hasn’t had fun before, proven by our over 30,000 Facebook fans. It’s kind of interesting how you can take a rather utilitarian, never-think-about product and turn it into a brand that customers enjoy engaging with.
To learn more about minuteKEY or to find a kiosk near you, visit www.minutekey.com