Challenges of building a hardware AND software company simultaneously

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Today’s guest is Greg Marsh, the founder of Key.me, an app which allows people to copy their keys at robotic kiosks.

I want to talk to him about the issues he faced building a hardware and software company simultaneously. I heard there were many.

I also want to talk to him about the competition. We’ll get into revenue—all that coming up in this interview.

 

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Greg Marsh

Greg Marsh

Key.me

Greg Marsh is the founder of Key.me, an app which allows people to copy their keys at robotic kiosks.

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Full Interview Transcript

Andrew: Hey there, freedom fighters. My name is Andrew Warner. I’m the founder Mixergy, where I interview entrepreneurs about how they built their businesses, and I do it for an audience of ambitious entrepreneurs.

More and more, when I try to reach out to somebody who’s built a successful company, I will go into my inbox to find them. And then, as happened to me just earlier today, I find long time ago emails from them because they listened to Mixergy as they were building up their companies.

One of my favorite examples is the founder of Tuft & Needle. I just got two of those mattresses. The guy is doing $170 million in sales, I think. And I still go back and see old emails. Whenever I interact with him, I always go back to our older emails from like 10 years ago, I hit Reply on those and we continue.

Anyway, so, Greg, I’m glad that you’re smiling as you hear that because somewhere out there there’s somebody who is building a phenomenal company right now, they’re listening, they’re arming themselves, they’re building their company and then they’re going to be out here doing an interview just like you are right now and saying, “I saw that Greg Marsh interview. That’s the one that fired me up.”

Greg: I’m excited for you to mention that we’re doing $170 million in sales, coming soon.

Andrew: Not yet, but we’re getting there. Are we there yet?

Greg: Sub $100 million, but growing quickly.

Andrew: That’s what I see. All right. Greg, who you just heard, is the founder of KeyMe. Get this, if you’ve ever been in, I think you guys are in Lowe’s, right? You are in a bunch of places that we recognize. Is Lowe’s one of them?

Greg: Lowe’s is not one of them. Were in like Bed Bath & Beyond, IKEA, Albertsons Safeway, Kroger, Rite Aid, several others.

Andrew: Oh, you know what it is? There was an ad . . . No, I guess maybe you were . . . Anyway, were you ever at Lowe’s?

Greg: We have one competitor and they’re in Lowe’s. That’s probably who you’re thinking about.

Andrew: I see, KeyMe “Locksmith in a Box” at Lowe’s. So Forbes must have grabbed the wrong video and tagged it inappropriately. But it’s interesting that you guys are such leaders that you get credit for it. But here’s the idea. Regardless of the store you go into, you just take your key, you stick it in the machine, the machine will spit out a copy of the key. You can even have different designs on it, right?

Greg: Yeah, that’s exactly right. So we characterize what we do is like access services. So primarily locksmith services and it’s this really big offline. The service industry is about $12 billion each year in the U.S. and has seen almost no innovation in literally 100 years. So we’re making keys as part of that, we’re solving lockouts, and I’m really doing that through the kiosks as you mentioned.

Andrew: And the digital aspect of it is I can take a picture of my key right now today using your app, and then when I lose my key, I won’t have to call a locksmith, pay a few hundred bucks. I could instead go to one of the stores that has your device. I connect through the app and out comes a key.

Greg: Yeah, that’s exactly, right. So you can scan your physical key from our app, you’re using your phone. We use computer vision to extract all the geometrical features of that key. If you want a copy, you can order it in the app, and we’ll cut and ship your perfect copy in the mail. That’s really the first ever e-commerce platform for key duplication. You’ve got two plus million keys being made every single day. So we really think we should be a market leader . . .

Andrew: That you guys do or in general?

Greg: No, in the market, in the U.S.

Andrew: In the industry.

Greg: Yeah.

Andrew: I’ve got it. As you say that, I always think of an evil use for this and I want to bring up and then I also think about like the competition that I want to bring up, and I’m curious about what size revenue when we’re talking about it.

But first, let me tell everybody that I’ve got two sponsors for this interview. The first is going to host your website right. You’ve heard me talk about them a million times. They still work really well. It’s called HostGator. And the second is a sponsor you’ve never heard me talk about. If you want to do PR, like one of my past guests have done, you’ve got to find out about this company called JustReachOut. I’ll tell you about them and what they did for a past guest here on Mixergy.

First, Greg, I’m going to hit you with a hard question that I know you’re not going to answer, but we’re going to see how close we can get to the answer, which is revenue. Like, how much money are you making creating these keys?

Greg: So we’re doing double digit millions of sales, growing very rapidly, and our ambition is to be the dominant service provider in this $12 billion year space. A lot of work to do to get there, but we’re on a really exciting trajectory.

Andrew: So wait, double digit. We’re talking at least $10 million. Significantly more than that?

Greg: Getting there, yeah.

Andrew: Okay. At least $10 million selling keys. How much does a key cost? If I go into one of, you call it a kiosk, but we’re talking about this like tiny little machine. I go into the machine. How much am I going to pay to get a key?

Greg: So we make a whole bunch of different types of keys, so on the low end of the spectrum, if you just have a really simple, residential brass key, you can insert into the kiosk and we’ll create a copy for you and that’s a couple bucks.

Andrew: Like $2?

Greg: Yeah, $3 or $4.

Andrew: $3 or $4, okay.

Greg: If you are making a fancier key, like, for example, we do RFID keys, so if you have a key card or key fob that you use to get in your building or your office, we have an antenna on the front of the kiosk and you can just tap that RFID key to the kiosk and we’ll actually dispense an RFID key on the spot to you. Those are $24.99 and usually about half the price of what an alternative locksmith or someone who can make a copy of those would charge.

Andrew: I have no idea you guys did that too. Wow.

Greg: And then we also do a vehicle key. So we have another set of antennas that can capture the transponder information from the chip of a vehicle key, and you would typically pay about on the low end, about $20 for the most simple key and then those can go all the way up to about $300. But on the higher end of that range, we’re generally saving you at least $200 or $300 versus the dealership.

Andrew: And all that from the standard machine?

Greg: Yeah. So the vehicle keys will be scanned and ordered on the kiosk, and you would put in a shipping address and then our team is actually going to program the key in our headquarters and ship it off to you. So in addition to the keys that are made physically by the kiosk, we’re mailing tens of thousands of keys a week to customers directly in the mail.

Andrew: Wow, I had no idea. Yeah, those keys for cars are super expensive. I’m paranoid about mine.

Greg: Yeah, they’re crazy expensive. And it’s a pain to go to the dealership and we are making that much more convenient. You can go to Bed Bath & Beyond and get a vehicle key made and bringing down the price pretty considerably.

Andrew: All right. So I know it wasn’t easy for you to get here. I want to find out how you got here. I’ve got to ask you a couple of challenging questions right up front before we get to how you got here.

Number one, if somebody sees my key here at the office, can they take a picture of it and then show up and . . . ? Like, have you guys print it and show up in my house. Can’t they do that?

Greg: So we in addition to increasing the convenience in the space, we’re very focused on increasing the security. And when you look at how keys are made traditionally, there is absolutely no security. So you go into a Home Depot or Walmart or an Ace Hardware or your local mom-and-pop locksmith. They have no way of knowing what key they’re making or who you are. There’s no record of it. It’s a totally anonymous process. They’re just tracing the key in a dumb way that doesn’t let them actually even know what keys they’re making. So the industry right now, no security and no accountability of key duplication.

For the first time ever we’re actually applying a digital process to key duplication. And in doing that, some pretty powerful things happen on the security front. So for every key that we make, we actually know what key we made. So we can verifiably say whether we’ve made a key or not.

And we actually have accountability on who is making that key. So we’ve got a financial paper trail. At the kiosks we have security footage, sort of like an A.T.M.

Andrew: So my friend, Devon, over here, I like him. He comes into the office. He says, “I going to take a picture of Andrew’s key.” He takes a picture of my key, goes to you guys, has the key printed and it would be printed. Comes to my house, starts going through my stuff. I don’t know what, like maybe he wears all my clothes. You at least would know Devon is the guy who copied my key and be able to come back and say to me or the . . . Who do you go to? Me? The police? Who would give that information to?

Greg: For sure. And just to be clear to you, the app is designed to not accept why by photos. So in order to scan a key on the app, it has to be fully off of the key chain, and it’s got to be on a blank white piece of paper and you have to take a scan from about two inches away, you have to flip it over and take a scan from another [position 00:08:02]. So you have to have full possession of the key.

And whether a key may exist or not, it’s very important that people treat their keys prudently and only give keys to people they trust. If a key is ever compromised, they should change their locks. Again, it’s important whether we exist or not. But the big difference is, if someone has malicious intentions, we are by far and away the riskiest option for them to copy keys because we are the only platform that can actually hold them accountable.

Andrew: Then who would get that data? Who would know that the keys had been copied?

Greg: So if someone’s home was burglarized, for example, we’ve had either customers directly reach out to us or we’ve got our director of law enforcement who’s named Ed Deveau. He’s the former Chief of Police of Watertown, Massachusetts and helped apprehend the Boston bombers. He’s kind of a big deal in law enforcement community. We have very [productive 00:08:53] relationships with various law enforcement, and if there is a crime, they can reach out to us and we can very quickly verifiably say whether we’ve made a key or not.

But we’ve made tens of millions of keys and we’ve never actually had an issue. But I do look forward to the day where we can actually hold someone accountable for them making a key that they should not have, because currently that’s happening significantly. It just there’s no way to catch those people.

Andrew: So, Greg, right now for me, it’s a no-brainer. And once we’re done with this interview, I didn’t realize how easy it was. I’m going to take a picture of my key. I’m going to have it in my phone. I’m always worried about getting locked out, and I know it will cost a few hundred bucks and it takes a long time for them to come. I might as well jump in an Uber, have the thing printed it out and come right back home and get in without having to pay a locksmith.

What about the future, though? I’m envisioning a world where all my keys are digital on my phone and I just say, “Okay, Siri,” or whatever the new call phrase is, “unlock my door.” And where do you guys stand at that point?

Greg: Yeah. So that definitely will happen. It will take a while to get there and to kind of quantify that. So keys and locks have not changed in 100 plus years. The primary reason for that is the cycle time on your average door lock is about 30 to 35 years. Vehicle keys have changed a ton in the last 10, 15 years, because the cycle time for a car is so much faster. So when you really look at the adoption rates necessary to displace physical brass keys, it definitely will happen but under astronomical assumptions where today every single new home doesn’t have a physical key, every renovation gets rid of it, people are retrofitting at higher rates, maybe in 20 years physical keys would be disrupted by 6%, 7%, under like really, really crazy assumptions. So we’ve got a lot of runway.

But in the meantime we are building out a services business, and at our kiosks you can increasingly order real world physical services. And so one of those is lock installation. So we actually want to install smart home equipment for you. Any way that we can help customers with any sort of access-related solution, whether that’s actually physically making them a key or even a fancy key like an RFID or a car key, or whether it’s replacing their lock with something that is opened up by a phone or whatever is going to help that customer get into a physical space is really what our company mission is.

So we see ourselves being a big part of installing locks and smart home equipment. But even under our ambitious scenarios there it’s going to be a couple of decades before physical keys are impacted in any real way.

Andrew: Okay. Let’s go back and understand how you got here. I’m kind of curious about this thing that you told our producer you did when you were a kid. I feel like . . . You know what I’m talking about, right?

Greg: I don’t. I can’t wait to hear. It’s a [inaudible 00:11:46].

Andrew: I know that as a kid, there was a period in my life where if I walked into a restaurant and it was full, I would just like in my head do the math like, “How much money must they be making? I think I’d love to create one of these things. It’s amazing.”

You did something similar. You’d walk into a business and you’d say, “I think I could improve it.” Like, you’d walk into a bagel store, you happened to mention to the producer, and see what and think what as you did this?

Greg: Yeah, I’ve always been . . . I don’t think I fully realized this until later in life, but I’ve always had kind of an operator mentality of if I were in charge of this restaurant or operation, what could I do to increase sales or scale things or improve customer experience? And especially when I was in, like a mom-and-pop diner or a bagel shop where there’s clearly like some existing customer base, they’re doing some things really well, but oftentimes there’s hugely ignored opportunities just because they have been doing the same thing for like three decades and haven’t revisited how to approach running that. So I always gravitated towards those types of problems and my mental state.

Andrew: You know what? I used to do some of that as a kid too. I look around and say, “How do they not even like remember to dust on top of the shop shelf?” Because they go blind to it. They walked in the first day, it was totally clean, nobody pays attention to the top shelf and then the dust comes up. In a similar way, they do things over and over and don’t notice a problem.

I wanted to just say that because I was the type of person who would notice the problems as a kid, as an adult I wouldn’t allow them to happen. And still, it’s hard not to. I wonder if you have a way of going into your business and have that tourist eye or have that new customer eye, have that little child eye and say, “Here are all the things that if I was a kid looking at the store, I would want to improve. Here are all the things that if I were looking at my business I would want to improve.” Do you do that?

Greg: So it’s a great question. After now operating a fairly complex business, we’re super hungry for feedback from anyone, but particularly customers. It is been interesting to get a product hat on as we’ve kind of grown in this business and really understand that prioritization is a huge deal for a tech company like us, where there’s clearly things that we want to improve and there are known issues and we have customers give us that feedback. And just a question of when to prioritize it and how to approach it.

So relating that to the kind of bagel shop analogy, like I don’t think they would have to make as many of those tradeoffs, but I do think that as an outsider, you don’t fully appreciate what it takes to operate a business and what bandwidth constraints or prioritization constraints do exist for that operator because, you know, time is precious and it’s tough to internalize that when you’re not actually in the mix running a business.

Andrew: So what you’re saying is, yes, you are more sensitized to it than the bagel store they used to walk into would be because you’re looking at customer feedback on a regular basis, but you’re also as an adult aware that you can’t solve all the problems and still be in business, and if you were to aim for that perfection, you’d be incapacitated, you couldn’t do anything.

Greg: I think that’s right. I mean, one of the most important things for me to do as CEO of the company, I think is to help determine scope versus focus. And that’s a continual conversation. And so there’s constantly things that customers or investors are pointing out that are clear opportunities for us, either to improve customer experience for existing product or to think about some new feature. And having that debate about when the right time is to approach that versus that incremental dilution that would mean for whatever is really, really core of the business.

And it’s tough to appreciate that as an outsider. And the way I’ve tried to approach that question is we had an identical team, the same team as ours and they’re, you know, in the building next to us and they were just focusing on a subset of what we’re focusing on. Would they be more successful than us? And that’s kind of the way I’ve tried to calibrate how much is the right level of scope. But it’s a . . .

Andrew: Wait, what do you mean? That’s an interesting question, to ask myself, for example with me, if the guy next door decided he was going to operate a podcast for entrepreneurs, “How would he do things better?” is that the question I would be asking myself?

Greg: If he was only focusing on a smaller level of scope for all the things that you’re currently working on, would he be more successful, if we had an identical skill set?

Andrew: And if you assume, yes, what do you do then?

Greg: Then you’re doing too much stuff. You need to [build 00:16:54] in order to prioritize.

Andrew: That’s the way that you know that you’re doing too much, you just stop and you say, “Look, if someone were to do nothing but let you take a standard key into the store and have it automatically get copied within a couple of seconds or a couple of minutes, would they do a better job if that’s all they did? And if they do, then you’re doing too much.”

Greg: Yeah, yeah, I think that’s exactly right.

Andrew: Have you actually used that framework and cut back on what you’ve done, or have you used it to not do new things?

Greg: Constantly.

Andrew: What have you cut back on?

Greg: Oh, man, a million things. I mean, we have a very creative team and people have lots of ideas. And so evaluating those ideas is something that we are . . .

Andrew: Is there an idea that’s been especially tough for you to cut back on?

Greg: I mean, there are very significant new types of products that we think would be really interesting to explore launching, but that would require, especially if they have a hardware component, millions of dollars in investment and a really significant development effort. And doing the math on, is it worth doing this today possibly at the expense of something else that’s really core to our success, is something we’re doing constantly.

We do a quarterly goal setting framework. So every 90 days where we have a structure to approach those types of questions.

Andrew: And the structure is?

Greg: So we define what’s really important about seven or eight goals for the quarter for the entire company, and then each team has goals that are inputs into those really high level goals. And as part of that process when teams create new ideas for how they could influence these really important company level goals, then we can really talk about like, how much bandwidth do we have and what makes the cut, and that’s a constant process. And it’s super important.

I think that that goal setting process is maybe one of the most important things for our success because as the company continues to add employees and scope, there’s so many different ways that people could spend time and that framework is really how we clearly define what’s important for our success and make sure that the whole company is aligned with what they’re working on to drive those really important things in the direction they want.

Andrew: So you are doing a podcast with me. My guess is you’re going to be doing other podcasts too. It’s part of some goal. What’s the goal that this is a part of and what’s the metric it ties back to?

Greg: That is an amazing question. So one of our most important company goals is how many people per day are touching our kiosk? And we view that, there’s lots of things that influence that, but one of the most important is our brand awareness. So if people need some of the services we provide, whether it’s a regular key or a car key or an RFID key, what portion of those folks know about KeyMe and go online to find us and then they go to a store? And so I would hope that this would, in some shape or form, influence that goal.

Andrew: So you just wanted a bunch of people, and the more are the better, people to know that you guys exist so that they would go and touch the kiosk or at least know that that was an option for them or search for it, right? And so did you guys sit down before this quarter and say, “What are some things that we could do?” And then this was on that list and then you picked this because it was better than the other options for some measurable way?

Greg: Yeah.

Andrew: That’s it.

Greg: So we would have like press and other media-related initiatives that are an input into how many people are going to touch the kiosk and this fits like very squarely in that.

Andrew: All right. Let me take a moment to talk about my first sponsor, which kind of ties into what we were just talking about. And then I want to see how this idea happened and it had to do with something that happened to your wife.

Here’s the thing. I interviewed this company, the sponsor, by the way, is justreachout.io. They do PR. I interviewed this company that did . . . you know when you get those annoying phone calls on your phone, Greg, and you just pick up the phone, maybe you interrupt the conversation with your wife or someone at work and you pick up and go, “Uh, this is fake.” You ever get that?

Greg: Yes, all time.

Andrew: Well, it turns out that Apple made a way to add a plugin that will check calls before they get you to see if they’re spam or not, but most people don’t know that exists because even Apple hasn’t done a good job of getting the word out. And then there are a bunch of different apps that created plugins, a bunch of companies that create plugins for your iPhone and Android phone to screen out those calls but most people don’t know that they exist.

So this company, RoboKiller, said, “You know what? We don’t want to be one more great tool that nobody knows exists and then we’re going to go dying thinking, ‘Oh, if more people knew about us, our software would’ve survived.'”

So they went to JustReachOut, and JustReachOut isn’t a PR agency which would cost a lot of money. It’s fair to say you guys pay more than $10,000, $15,000 a month for your PR, Greg?

Greg: Yeah.

Andrew: Yeah, right? PR companies, if they do a good job, they’re worth the money, but they’re definitely expensive. And so for a lot of startups, they’re a little bit out of reach. So what justreachout.io decided to do was say, “What if we can help people out with just a little bit of the work but also give them room to do the rest of the work themselves? What would that look like?”

And so what it looks like would for RoboKiller was, they helped them define how to express that message. What exactly is a robo-call? Most people don’t even know. How do you make that interesting for people? How do you get the kind of media that you want by telling the story that makes sense to them?

So they help them set it up. They help them identify the right targets to go after, by targets, I mean, media outlets, like ABC News covered them. And then they say, “Okay, there is nothing like having the creator reach out and here’s what you have to do. Now, I give you the people, I give you the message, I help you craft it all. I guide you through it all. And now you have a process that you can use to go and get publicity for yourself.” And so they did it.

And JustReachOut got the phenomenal press like many other people who work with just . . . Excuse me. RoboKiller got phenomenal press like many of the other people who work with justreachout.io.

If you’re out there looking to get press for your company, if you’re out there looking to get people to notice that you exist, go check out justreachout.io, justreachout.io. They will actually book a one-on-one demo with you if you use that URL so you can see exactly how helpful that would be.

If you hear me get a little bit nervous, Greg, and I . . . do you hear in my voice that I’m a little bit nervous doing this ad? Like I’m cautious, I’m making mistakes.

Greg: You can sound pretty good to me.

Andrew: You can call me out on it. I’m glad that it sounds pretty good. But the reason is this is a brand new advertiser. This is my first time reading them. It’s like an independent entrepreneur. People like HostGator, they got tons of money to buy ads from me. If one ad doesn’t work out, it’s fine. But this is just like a guy, who’s been really good at getting publicity for my friends, frankly even for me, he’s helped me out, has helped out my buddy Noah Kagan who introduced me.

So he said, “Let me try buying an ad with Mixergy and see how that works.” And he was here once as a guest, got a lot of customers. So he has reason to believe it’s going to work. But still, I want to make sure that he gets good response from this.

So if you’re interested at all and getting press for your business to help it grow, go check out justreachout.io, justreachout.io/mixergy to get that special offer and details on that page.

And say, “Hi,” to Dimitri once you get on a call with him. It’s probably going to be Dimitri. He does all the work himself, it seems like.

The thing that got me is you, like me, you went to study finance. I remember going into my boss’ office and seeing, at the time when I was in college, seeing that he read “The Wall Street Journal,” that everyone read the Wall . . . I love reading “The Wall Street Journal.” I love that atmosphere. You didn’t have that attitude. What was it about finance that made you say, “This is not for me”?

Greg: Yes. The first job I went through out of college was a finance job and I learned a ton. I think when you first work in a professional environment, you learn how to work, you learn so much about what you’re good at, what you’re not good at. So I had an amazing experience. But what was very clear to me after a year or two, was the people who I looked up to, you know, our chief investment officer and these really senior people that built these amazing careers, they were so innately excited by reading the Journal and seeing what’s driving the markets, and while those interested me I could tell I didn’t have that same level of passion. And on the flip side, what I really became aware that I had real passion about was operating and really trying to run a business and start something from scratch. And so . . .

Andrew: How did you know by doing this? You worked for, what? CM Capital Advisors?

Greg: Yeah, exactly.

Andrew: They’re a Palo Alto company, aren’t they?

Greg: Yeah. Great fun down in the Bay Area. And I think on weekends and nights talking with some of my close friends about startup ideas and that got me so excited about things I could do and thinking about how I would approach all those opportunities. I could tell like the level of energy is just so much higher. And so after a couple of years of being at CM, I really wanted to do something else.

So I end up being the first employee on a company that my friend founded and got my feet wet and learning from scratch and learned an immense amount and that’s kind of my first part of being a startup. Yeah.

Andrew: And then you went to Columbia Business School, and at that point your wife had this experience. What was the experience?

Greg: I had moved to New York to go to grad school, and my wife, my now wife, was living here and she just got locked out and had this really horrendous experience. It was late at night and she was not in a great part of the city. And the guy quoted one price and showed up and charge way more than that. And it just got me thinking about the locksmith industry. And as I started to research it, I became so fascinated at how large it was and at how little innovation had taken place. It’s one of the most mismatched industries, in terms of size versus investment or assisted operators.

And I think those ingredients combined, make it super interesting for someone to come in with a new way of doing things that’s technology driven that can be really, really disruptive and invaluable for customers.

And so I met up with some amazing engineers and end up dropping out of school and we started building stuff. This was about five or six years ago.

Andrew: $12 billion industry. That means every year people are spending $12 billion on keys to be made but also locks to be made and in locks to be installed, or what’s covered in that $12 billion number?

Greg: Yes, so the parts of market are key duplication for common brass keys. RFID key duplication is also quite large. Vehicle key copying is really significant as well. Emergency lockouts is a big part of that as well. And then there’s kind of a skilled locksmith bucket of installing locks and anything that requires a skilled locksmith at a home or office.

Andrew: I see. And so, if you’re were an entrepreneur in the ’80s, you might have looked around and said, “Can I turn this into a franchise?” Because that was like a hot business movement. But since you in the 2000s, you say, “Is there some technology that I could apply to this that would make this better?” The thing that comes to me is it doesn’t seem like an obvious next step to say, “Can I make duplication easier?” I feel like a lot of people go into, “Can I put a code on the door so people wouldn’t need to get locked out,” or some other way. How did you come up with the approach of, “I’m going to find a way to make duplications simpler”?

Greg: We really approach it from how do we solve lockouts in an innovative way. And originally, we were talking about physically storing real house keys, which is a really bad idea.

Andrew: Meaning, someone would send you the house key, you’d keep it somewhere local and then they’d get it or, what?

Greg: We’d had like a robot or a self-service kiosk with lots of a little credit card sized drawers and you could like physically store your key there. So almost mini-storage in an automated way, which has a million problems and is not a good idea.

Andrew: But I get how you’re thinking about this problem. And there’s some logic to it. I go to a local grocery store and I can get my key whenever I want, but it’s not the cleanest approach. But that’s the way you were thinking, “How do I make it easier for someone who’s in my wife’s situation to get the key cheaper and faster and more logically?”

Greg: And so after we kind of thought that idea through, we came up with the concept of, “Hey, what if we actually just digitally stored the key and we would capture all the information we would need to reproduce the key and then we could just cut it on the spot. And we when we identified that as an interesting solution, it really opened up lots of things. We could also just copy keys, if we’re doing that. And that is kind of where it really started, in terms of both being able to provide a really compelling solution for key duplication as well as lockouts.

And as we’ve grown, we’ve added the app and the ability to copy different types of keys, like RFID and vehicle and now services. But it is really the core function of storing key information and making it in a really convenient way. That was the foundation.

Andrew: Tell me about that prototype that you created. What did that look like? What did it do?

Greg: So hardware is a beast. So like, you know, it’s well known, in startup land that hard ups are hard and . . .

Andrew: Hard ups, actually, it’s hard. Is that what is called? Hardware startups are hard ups?

Greg: I made that up but you can use that one now.

Andrew: That’s a great one, yes.

Greg: Hardware startups are difficult both to attract funding as well as to actually the long development cycles, which requires a lot of money upfront. So our early prototypes were mostly hand built. It took the entire company, which at time was like half a dozen people, a month or two just to build something that was semi-functional. And so we had about three or four generations of those home brewed kiosks [come out 00:31:28].

Andrew: The first one, from what I understand, had something like this, right? Like a camera, a crappy webcam that stood over something, over a desk. You’d put a key underneath it, the webcam would take a picture, you flip it over, take another picture. I get that part. How would it go from a webcam image to a key?

Greg: So one of the most important technical competencies to make our solution work was really good computer vision machine learning. We’ve become really good at using software to process a photo of a key to extract all of the information we need to make that key and . . .

Andrew: So this first version it already did that. It knew how to extract all the information that you needed.

Greg: In a very basic way.

Andrew: And then, why did you use to print it? Was it 3D printing back then or was it something else?

Greg: So we had just an off-the-shelf CNC milling machine that for like $5,000 online, so none of the hardware initially was custom. We bought it and we focused on the cameras and the software.

Andrew: And then you would make it and ship it to the person, or was it on site you’d have that machine?

Greg: On site, so we’re just prototyping that first kiosk. So, and this is all at Columbia. So we’re kind of squatting in one of the labs. And when we’d make a new innovation on the prototype, we’d kind of bring it up to the lobby and give away free keys and just get people to make it. And it took 15 minutes to make one key. It was like a horrible experience.

Andrew: Someone would come, you take a picture of the key, you’d sit and you’d actually start to cut it out using this machine. And then at what point did you say, “I think we’ve got it and we’re going to create a system that’s self-contained”?

Greg: So we were able to, with that very simple prototype that was super manual and use a lot of off-the-shelf hardware, add a $300,000 friends and family round. And that was sort of the first . . . At that point, we kind of formalized the team. I end up formally leaving school, and we then had enough money to build custom hardware and we put it until like a bodega in Queens, New York.

Andrew: And you had that first hardware, you created it in a way that it would take a picture and cut a key right there for people.

Greg: Yeah, that’s right.

Andrew: So where did you build it? Who built that?

Greg: Our engineers did it all internally. So we just bought a bunch of off-the-shelf equipment, and we had access to some industrial equipment like laser cutters and mills, and we just we built it all from scratch.

Andrew: Where did you find the engineers who could do this?

Greg: So some of them came from Columbia, and some other folks were recently graduated from other good schools and . . .

Andrew: How’d you find them? You had very little money. You didn’t have any experience in the space. How did you find people who are willing to work with you?

Greg: One thing which for anyone who’s in school I would highly recommend it, I talk to a lot of people thinking about starting a company and one of the, especially on the business side, one of the most common things is, how do I find a technical co-founder? What I did was, I was at Columbia and I went to the engineering school and looked up the professors’ office hours that I thought were relevant to building this robotics and computer vision. And just went to their office hours. And they had never ever had a business school kid go to their office hours. So I think they were a little taken aback. But they appreciated me being there and getting their advice.

And I asked them like, “Who are your best students who would want to work on things like this in their spare time?” And they put me in touch with their smartest and best students who were excited by tinkering on things like this anyway. And that’s how I was able to meet some of our first engineers and so . . . Yeah.

Andrew: Wow. And this was these were undergrads or grad students?

Greg: So a guy named Zach Salzbank, he was just finishing up his grad work at Columbia. And then a guy named Kris Borer had just graduated from Penn. So he was not at Columbia, but was part of that.

Andrew: Wow. Can you imagine this? Imagine I start a new company and I know I’m going to need great engineers. But everyone needs great engineers. So what I do is I enroll in business school, and then I start going to all the other schools in the business school and asking for the resources and the people that I need, and I start to meet people. Now I’m a fellow student. Everyone wants to help a student, especially if it’s a professor of the university that you’re a student. Boom. Oh, what a great . . . I know that you didn’t engineer it that way, but that’s brilliant.

Greg: It helped being at the school. But if I were to do it again, I honestly don’t even . . . I think if you reached out directly to professors in schools that were good, that taught the courses you want, I honestly think you would get a pretty good response rate from professors who would send an e-mail around their class. And a university is just such a ripe area for finding really awesome people to help start a company with you.

Andrew: You know what? I wonder if I could even do like office hours right now. Let me see, I’m going to go to engineering.columbia.edu, site:engineering.columbia.edu. And then and I’m going to do, what is it? Office hours, can I just find they’re open up? I can. Look at that.

So here is Mercedes Kriesel, the first person who came up. I see her phone number. I see her email address and office hours are 2:00 to 3:00 p.m. by appointment. I can make . . . That’s great. That’s brilliant.

VCs do this a lot. There’s a VC who moved into L.A. when I was doing Mixergy there, who said, “Andrew, can you introduce me around?” I introduced him to some, to a few people who were really helpful in the area. He said, “The other thing I’m doing is I’m going to talk to universities. Nobody’s talking universities to get to know the people who are going to be future prospects.” And that helped him a lot too.

Let’s talk about the first client, the first customer. Was that bodega kind of customer, how’d you get that bodega to allow you to bring in something that you told our producer was kind of an ugly prototype? How did you get that bodega to say, “Yes.”?

Greg: I just went knocking on doors and got rejected by a million folks, who didn’t want to give me the time of day. And we finally found a guy who liked the idea. I guess he had actually cut keys manually, but it was too much of a pain. So he got rid of his machine. And so he was like a really good connection. And we showed up and installed the kiosk. And it was about 200 yards from of our office. And we were probably there 10 times a day because the kiosk was broke.

Andrew: Any time there’s a problem, you would go in, you’d see the problem, you’d learn it and then you fix it.

Greg: Yeah. So that was super important to validate technically that we could actually operate a kiosk from our office that had some level of functionality that we needed. We also validated how many people were touching the screen and were buying things, and for us to be able to raise money we really need to show that there was a path to unit economics that were really strong. So if we actually could build a lot more of these, that that would be a good investment to make.

And so we’re able to get all this data that then let us raise more serious funding that let us really scale up.

Andrew: Let’s talk about the one VC who wanted to invest and instead ended up helping you find your first big retailer. You talk to the VC, and I’m assuming it’s a he, it seems like most VCs are still he. He . . .

Greg: It was actually a female VC, which is great.

Andrew: Oh, wow, look at that. Look at me making assumptions. All right. So she said to you, “I need you to help me validate something.” What was the thing that she wanted you to help validate?

Greg: So we were trying to raise our very first institutional round, and it was tough. VCs are allergic to hardware. They don’t think about the locksmith industries. There’s a lot of pitch work that that was necessary to really get people excited. And we had a really prestigious, top tier VC who started to do pretty deep due diligence. And their single biggest concern was, “Are retailers actually going to want this?” And for this to be a really successful billion dollar business, you’re going to need major retailers who want lots of kiosks, and how do we get comfort with that?

And so what they did was they put us in touch with a really senior guy at 7-Eleven. And they said, “I’m going to make this intro for you, and if you convince this guy that he should put kiosk in a store, then that’ll go a long way for us getting comfortable in this concern.”

So we hit it off with the 7-Eleven guy, and they end up being our first retail partner and they’ve been a hugely important part of our success. And that VC did not ultimately end up investing in the company, but that introduction was one of the most important moments in the company’s history to get a major retailer which then let us really looked legitimate to other major retailers.

Andrew: And part of the thing that struck me about your conversation with our producer, I’m assuming it was Arie who you talked to, was that they had an innovation center at 7-Eleven that I’m seeing more and more bigger companies are trying to open themselves up to new ideas from startups, and they had somebody who could talk to you, who could be more open and not think, “This is crazy. Don’t bother us. We have stuff going on.” How helpful was that?

Greg: Yeah. The folks we connect with varies by retailer. So they’re structured a bit differently. But one of the departments that always we want to talk and most are these kind of emerging innovation teams within these big retailers. And as you know, Amazon and other folks have really changed the retail landscape in the last decade, a lot of these retailers are trying to increase innovation and rethink things and have a part of the company that has a greater risk appetite.

And so they’ve created these innovation groups. They generally have a lot of power. They usually report up into the CEO or really senior people. They have a much greater tolerance and mandate for risk, which is important for someone like us. So a lot of these retailers are very risk averse, they’re the teams that are not in innovation. You’ve got people who are constantly thinking about not blowing up their promotion, and they’re just on this constant march to like gradual success. And if there is a 5% chance that you’re going to interfere with that march towards their career growth, it scares the hell out of them.

And so being able to talk to someone who is not as scared about championing something new internally and having it fail is really, really important. And so these innovation teams are becoming more common, and they’re great to work with for all those reasons. They can really get things done much more quickly than some of the more traditional kind of merchandising or other departments in these retailers.

Andrew: All right. I’m going to talk about my second sponsor. I was actually, if you see my eyes rolling around, it’s because I’m doing like a search on you to see how you’re doing your web hosting, what you guys are using. You guys use a lot of technology for something that I feel like is just keys. It’s like everything from Unbounce is on your site to . . . What else do you guys have on your site? Zopim, Crazy Egg, Google Analytics, of course.

So then I started getting lost. Like even you guys even use, I think, Hello Bar, at least as early as August 2018 you guys had Hello Bar on your site. First detected, 27 . . . I’m like constantly deep diving. I love researching people. The little details just tell me so much.

Here’s the thing that I want to bring up right now. There is a site. It’s my second sponsor, HostGator. I, for years, read Jason Fried and David Heinemeier Hansson’s Blogpost for years. Did you ever read them?

Greg: I haven’t.

Andrew: You haven’t. They were one of the early guys to create software as a service online. They competed against project management by Microsoft, which was really big in the beginning. And so they’d have to teach people, “Look, here’s how you can make things simpler by keeping it online, and yes, if you’re in an airplane, there’s no internet on the airplane, you’re out of luck and you can’t do your project management. But look, how many times are you on an airplane where you don’t get access? Here’s how it works in a real world where everything’s online.”

And then they shifted to teaching entrepreneurs about how to run their business in a more organized, careful way. Then these blog posts became things that people passed around, became things that drove other entrepreneurs to get into cyberspace. And at one point they said, “You know, why are we hosting the blog post on our own site? Let’s go to this thing called Medium because that’s where all the readers are.” And so they went to Medium, and sure enough, their traffic spiked up.

But over the last couple of months, I know I’ve been sending them tweets about this, every time you go to Medium and suddenly there’s like a new bar at the top saying, “Did you get the Medium app?” And then if you get the Medium app, well, you can’t read until you until you log in with Twitter. And then if you log in with Twitter, they don’t really want you to read these articles by people like the founders of Basecamp and other bloggers. What they want you to do is read a couple of articles and then go pay for their paid subscription because they’re trying to revolutionize online content.

Meanwhile, the guys, David and Jason, are not looking to revolutionize content. They just want to keep things simple and stop with the popups and stop with the bars. And so what they decide to do is take control of their own content again and they shifted from hosting on Medium to hosting on their own website using WordPress.

So what does that have to do with my sponsor HostGator? I think a lot of us have businesses that rely a lot on other people’s sites and a lot on other people’s software. Totally fine, right? Get a lot of your traffic from Twitter, get a lot of your traffic from . . . a lot of your engagement from Facebook groups, all great. You still need a home page and you need one that just works and doesn’t cost a lot of money. And for that, I urge you to go to HostGator.

When you go to hostgator.com/mixergy, you’ll get a super low price. You’ll get hosting that really works. As far as I know, they’re offering us the lowest price ever, hostgator.com/mixergy offers that.

And then finally, if they’re jerks, if HostGator does not like blow your mind with how good they are and you decide you don’t like them, just pick up your stuff and move over to another hosting company, super easy.

And I say this in reverse too. If you’re not happy with your hosting company, it’s super easy to switch to HostGator. Take control of your website, take control of your company’s presence by going to hostgator.com/mixergy.

There’s so many other companies I want to bash with that, but I feel like Medium is an easy one to do. But these hosting companies now that are popping up that lock you into their world, that even your own domain you can move out, frustrate me.

All right. I was trying to check out like what you guys do and seeing how you guys host. I think you guys are hosting on just, what is it? On Amazon, right, S3?

Greg: Yeah, that’s right.

Andrew: Yeah, I think for some things that makes a lot of sense. But when you’re trying to update your site on a regular basis and you don’t want to deploy any engineers, WordPress works well.

Right. You’ve got your first customers from that. How did you then leverage your relationship with 7-Eleven to get other customers?

Greg: That is a good question.

Andrew: I guess you wouldn’t call them customers, hosts.

Greg: Yeah. We consider our retailers customers. Yeah. So a variety of ways, I still went bottom up to a couple more retailers. So Bed Bath & Beyond is one of our most important retailers. That was another retailer that we got early on after 7-Eleven, and I went into their flagship store in New York and networked my way up to the manager and kept going back and getting into more and more senior people and finally talked to the guy who ran that store and convinced him to put a kiosk store and . . .

Andrew: This is you. I know that store. It’s like right in midtown. It’s got that great escalator for your cards. I would have thought these guys are too busy. The guy who’s running the store has no control over what’s in there. What made you say, “I’m going to go in there and convince them”?

Greg: So we just thought they’re about such a good fit in terms of the . . . We drive a lot of new mover traffic and the types of people who need keys and it really seem to align kind of the home services they provide and what we provided. So I was very hungry to build that relationship and just needed to have a really compelling pitch to the store level folks on why we would be really valuable to their customers and their stores. And one of the most significant things we do for our retailers, we drive really high levels of new mover traffic. And these are people who are generally spending about 15 grand in their first six days post-move, and it’s just a really high LTV customer for these retailers. And so I was able to effectively communicate how we did that and got this guy excited, and he took a risk on us. But that’s a little bit unique. Most retailers have a lot of central planning. Bed Bath they really delegate a lot of decision making to the store level. And so they’ve got a top . . .

Andrew: How did you know that? How did you know that they would allow that where IKEA and others wouldn’t?

Greg: I did not. We just got super lucky.

Andrew: You were just walking around saying, “It’s on me. I’m the founder of this company. I’ve got to open up the doors.”

Greg: Yeah. The engineers were building stuff, and my job was to make sure that we had homes for the things they were building. Bed Bath is a big one for us, so we went to their New York flagship store and worked really well for their customers, and we were driving a long track to their stores. And then we kind of worked our way up to the East Coast regional folks and then to corporate, and now it’s one of our biggest relationships.

Andrew: So Greg, let me ask you this. If I were to consider something like this, immediately I would think, nobody thinks to go into a Bed Bath & Beyond to have a key made. By the time that they discover it’s there, it’s probably after they’ve locked themselves out, they become sensitized to it. It’s an issue. And it’s solved. How did you know that this would be something that people or how did you make it so that the end consumer, the consumers would walk in and know that this is a place to get their keys made? How would that work?

Greg: So we are currently driving over 10 million customers a year into our retailers. And one of the ways that we really knew early on that it was going to be important to make the retailers value us was that traffic generation. And so the way that we do that is when we install a kiosk, we create an online presence for that specific location.

When you’re looking to make a key or some other locksmith service, most people go into Google and they type, “Copy keys near me,” or, “Locksmith near me.” And we are capturing the searches that are occurring nearby that physical store, and we’re driving those customers into the store. And we’ve been doing that since the beginning of the company, and that’s been really, really important to making these retailers love us.

Andrew: It’s SEO.

Greg: That next generation, especially of new movers is really what’s been the foundation for our success in retail.

Andrew: And you have to go, I know we’ve got . . . I’d love for you to stay with me another 10, 15 minutes. You okay with that?

Greg: We’ve got time. Sorry for that.

Andrew: I know we’ve gone a little bit over. So search engine optimization, and actually, Greg, is one of the things that locksmiths have done well for years. You’ve seen that where, I don’t know if it still exists, but you go into Google Maps, you type in locksmith and you end up with like 50 locksmiths on your block and think, “Whoa, I didn’t realize there were that many locksmiths.” It turns out there aren’t. They’re just really good at SEOing themselves, or these agencies are really good at SEOing themselves. And then when you call up the agency, they sell the lead to a local locksmith. How did you know you could beat them?

Greg: So it’s a super interesting and fraudulent space. So the vast majority of listings that appear if you’re making a search like, “locked out,” are not actually locksmiths, they’re BS companies that [bid on 00:51:14] keywords. And then once you call that number, they’ll pass it off to someone else in the lead gen capacity and get paid for passing that call off and they have no incentive to care about customer experience, and they’re just are charging that lead gen game of buying and selling.

Andrew: Yeah. But they’re good at it, and they’re hard to compete with. And Google has had a hard time over the years getting rid of them. How did you know you were going to beat them? What did you do to beat them?

Greg: Yeah. So Google is an important part of our business. And the folks at Google, especially on the maps team are interested in how to create quality in this locksmith category, which is a really big but really fraudulent category. And they’re constantly playing whack-a-mole with these fake listings and they had to take them down. And so we have about 20,000 reviews on Google. Our average rating is 4.8 out of 5 stars. The industry average is 2 out of 5. So we’re able to really bring quality in a very scalable way in this category. And Google obviously it’s not totally clear how they rank listings, but, obviously, the average rating is one of the most important ranks there.

Andrew: How are you getting ratings? By the way, I fact check you as you’re talking. I like you, I feel like you’re a nice guy, and then I keep worrying, “Don’t get taken in, just in case, do a search.” So I did do a search. I do see you guys in there a lot. So KeyMe all over Google search results. I just did it. I typed in the word “key,” and Google suggested Key Duplication Services, which I thought that’s what I would do if I was locked out. And then I saw, yeah, there’s a Safeway, not too far from me. It’s open till midnight. I’ve got to remember this in the future. And 12 people freaking rated the kiosk. Why are people rating the kiosk? Are you doing anything to get those ratings?

Greg: I mean, making keys is a very common thing that is such a shitty process historically. So the average error rate in a traditional key duplication environment is about 15% to 20%. It’s just we’re bringing that down to a very, very low numbers and doing it in a way that’s much more convenient and delightful. So I think when people use our service and they just experience how significantly different and better we are than traditional methods, they really respond positively to that and that’s what comes up on those ratings. So we’re all about customer experience and it informs everything we’re doing. But I think the most important thing for us to be a billion dollar plus company and really transform this industry is to make customers love us. It informs everything we think about.

Andrew: What is this minuteKEY? They show up also. Is it weird to talk about your competitors here? You seem okay with it.

Greg: I mean, it’s a very uncrowded space, and that’s one of our competitors. They’ve been around for close to . . .

Andrew: 2008.

Greg: Yeah. So close to 11 years. And were out long before we launched this company. And they provide another self-service solution exclusively for key duplication.

Andrew: And so when you guys came up with your idea, were VCs telling you, “There’s a company that already does that. We don’t . . . ” And then comparing you to them?

Greg: For sure. That comparison happened a lot. There’s lots of ways that we’re better and have been really successful. In all of our heads-to-heads we’ve displaced them pretty significantly.

But it is interesting, from a fundraising standpoint, I think VCs tend to focus on competition more when there are less competitive dynamics. So like in photo sharing, where there’s a million apps, people don’t talk nearly as much about competition, but if you are in an [area 00:55:12] that has very few players, it tends to get a lot more interest, which I think is a little bit counterintuitive. But yeah, we’ve got a healthy competition with those guys and are giving them a good run for their money.

Andrew: They’ve got $39.2 million in revenue, 2017. You guys are doing more?

Greg: I can’t respond to that directly. But part of a larger company, which does about $2.5 billion in sales doing key related and other hardware services. They’re part of a larger company.

Andrew: Okay, I see. What about this? I wouldn’t have thought of this about you. You told our producer. “Look, as this company gets bigger, my goals then keep getting bigger.” And as you take on more funding, your demands get bigger, you want a billion dollar exit, right?

Greg: Yes, that’s definitely our ambition internally and certainly our investors. So if you would have told me six years ago, when I started the company, that we would have this many kiosks out and being in all these great retailers and have tens of millions of customers, I would have said that’s the most amazing story ever.

But as we’ve been growing, it’s been lots of baby steps, and certainly the bar keeps getting raised in terms of what success looks like. And at this point we’ve got really ambitious plans to become a billion dollar plus company and to be the most recognized and trusted brand in the locksmith industry. And so to get there, we’ve got a pretty fun [molecular 00:56:56] path, but a lot of a lot of work remaining, so super heads down on execution.

Andrew: Do you feel like you want this personally? I was talking to Jason Fried, the founder of Basecamp, and he said, “People, tend to keep trying to do more and achieve more, and maybe really we should be happier with where we are.” Usually when a guy said that to me, I say, “Okay, enjoy your time at the mountaintop, but the rest of us, if you’re on Earth, are really working hard and, yeah, we do want more.” But the guy is doing well. He’s doing tens of millions of dollars in profits. Do you feel like maybe you’re getting pushed to have to do more when, in reality, you’d just be happy producing consistent revenue and just have a good profitable business?

Greg: I want to create an industry changing company and really do something super special and big.

Andrew: Why, Greg? I don’t mean to push you because I disagree, but why? Who cares? If the locksmith business changes for the better, how is the world so much better that it’s worth you killing yourself and dealing with me doing my interview and forcing you to do a pre-interview and then spending an extra 10 minutes doing tech issue and then another 10 minutes after the interview going even longer? Like, why is it all worth it for you to change this industry?

Greg: The most rewarding thing in the world for me is tackling really, really challenging stuff with a group of people who I really admire and want to do hard things with, and in that process of going through lots of obstacles and being successful through those obstacles is the most exciting invigorating thing that I can do. And so I get innately excited by looking at all the hard shit we need to do in the next couple of years to become that billion dollar company and to ensure that we are successful and that our team is kicking ass and we’re doing something truly, truly unique and special. That’s the stuff that gets me fired up.

Andrew: So there are times for you also where it’s just, “Look, another key, I’m not that . . . ” yes, it is nice that you get all these wins. I really, I was frankly looking at your feedback and people are really happy when they get back in their house or when they get a key for less price. There was one guy who was upset because you guys charge too much, but charging too much in a few bucks per key, it’s not a big complaint.

So I get it, but you’re saying, “That’s great,” but the other thing that excites you and fires you up is the same thing that excites my 2-year-old when he completes a puzzle. This innate need to just solve the hard problem and figure out the next big challenge. And for you, the next big challenge is?

Greg: We are really focused on scale. I mean, we spent a lot of effort on making a really complex technology work and work really well and have a great customer experience and do all these keys that are really challenging to do, and now we want to grow it. We’re in about 2,000 locations right now. We want to be at over 10,000. We want to be making over 100 million keys a year. And just change what it means to have service quality standards in this industry and expectations for customers. And I think we’ve got a good path for that.

But, yeah, just scaling, making customers love us and being the dominant player in this industry.

Andrew: You know, I’ve known about you for years because it is kind of a cool thing in the tech industry to write about, the idea of, “What if somebody takes my key and makes a copy of it?” I didn’t invent it. There were a couple of blog posts on it years ago.

And still, dude, I still never installed your app. I don’t know why. I think for some reason I just assumed it was only if I need a key made and I have it delivered in the mail. It just didn’t penetrate in that, my head that what I could do is just take a picture of it and when I’m locked out take an Uber over to the store, Safeway is not too far from me, have it made and then come back home and be okay. That is a huge realization that I got from this interview. So I just downloaded the app.

Greg: Those are the coolest stories that come in too. Like we had we had one woman who was going to Africa for like a month and left her dog locked in her house and didn’t leave the dog sitter a key. And so right before she gets on the plane, she scanned it with her phone and then shared it with the dog walker and the dog walker went to 7-Eleven and got the key and went in.

It’s like really cool stories like that that people just go berserk because the alternatives were not very appealing, in terms of how to solve those situations.

Andrew: I think I don’t realize what it is until I see a use case for it, and even if I saw your, and I’m sure I did . . . saw your kiosk, it just wouldn’t penetrate me that this is what I would do. I think for some reason I still think; “Let’s go to the Ace Hardware store where the guy will make the key.” And they’re really nice at the Ace Hardware store. But I always make four keys, because you never know if that one key is not going to work. So I get a bunch of backups, just in case.

Greg: Yeah, the error is a super high, and manual key setting is not profitable. I think some retailers don’t do as good of a job as others, as looking at it on such a unit basis. But with labor rates and return rates and the cost of inventory and supply chain, it is not profitable for a human to make a key when they’re selling it for $1.99. They’re losing money. I think on average, when a person is making a key manually, they’re losing about $0.10 to $0.50.

Andrew: It’s interesting, I wouldn’t have thought of that. Because you’re saying that someone who has to go and just be there with me for a good five minutes as we pick the key, wait for me to go through it, right?

Greg: Yeah, when you look at their time, combined with the error rates and, you know, a person having to come back a second time and recut the key, the cost of inventorying. A lot of locksmith shops, like their most valuable real estate in the store is taken up by all of these . . .

Andrew: This big counter with a lot of keys behind it. See? I would’ve noticed it and I would’ve thought, “Old industry, kind of sucks.” But you don’t notice what sucks. I feel like you do have to, as an entrepreneur, be sensitized to what sucks and where an activist or a politician will stand up and just be upset. We have to stop and say, “There could be a better way.” And I feel like that six-year-old or eight-year-old you would have been very proud that that you’re doing that right now.

All right. Let me close this out with the last question. You might be sensitizing my process. What do you think I could do differently, and say it on camera on mic, let people see it, as you’ve gone through our pre-interview, gone through the booking process, be the person you’d be proud to be if you are six-year-old like giving feedback right now. What do you think we could improve here at the Mixergy process? I want to get better.

Greg: I mean, first off the links and the coordination was super helpful. What I truly appreciated, and I’ve done a fair amount of interviews at this point, is the level of due diligence that you did, both at the pre-interview as well as . . . Just a lot of the details and even looking stuff up in real time, I think is cool and I’ve not encountered that before. So all that was super valued.

I don’t know. I think, maybe if there was, and I perhaps should have asked this the beginning, if there was a theme or something that you would have hoped to come across the interview, having that context early on could help me couch my answers in a way that reinforced something that could be interesting to you and your listeners . . .

Andrew: So not just a story of how you built this, but are we looking for how to come up with ideas, how to partner with big companies and so we can keep tapping into that, is that what you mean?

Greg: Yeah, like that or . . . I don’t know, like we had to raise a lot of money. So if you thought like fundraising would be a really interesting thing, I could talk about lots of things I messed up and things that went well. And now I’ve learned to pitch well, board management and team structure I’ve learned a ton on mistakes we’ve made on team and hiring and how the organization changed, like whatever like topic was . . .

Andrew: Yeah, yeah, yeah. And I could have actually gone into that, on hiring, I wanted to bring that up, but I just didn’t have enough time to do it because it is such a meaty topic. But I did see that you said to our producer, “Hiring fast and firing faster are one of the biggest challenges.”

Greg: Yeah, for sure, for sure.

Andrew: Yeah, that sticks with me all the time. Why do we always, Greg, you must have heard that a million times as an entrepreneur, maybe they say, “Hire slow and definitely fire fast,” which in your experiences reinforce. Why do we all make the same mistake of not firing fast? What is it that that keeps us from doing it even though we know we should?

Greg: I think a variety of reasons. I think a lot of times any startup is going to be heavily bandwidth constrained and it’s really hard to think about firing someone when you’re already short staffed. I think people shy away from firing people to begin with because it’s not a fun conversation and people tend to postpone it for that reason. I think people end up settling so you get used to underperformance, and that can be really dangerous and you’re not proactive enough on really maintaining that very high bar of what it means to be on a team. I think it’s a variety of all those reasons. But I think that, when I look at mistakes I’ve made, the biggest ones are always people related.

Andrew: Yeah, and you know what? And it is still really hard. I feel like I could use someone, and I do have someone on the outside who just constantly helps me evaluate people and pushes me to say, “It’s actually not working, Andrew.” And I’m so reluctant to do it, because I started in business because I like people. I like money, and I like people, now . . .

Greg: But the way that we kind of look at it is if someone were to quit tomorrow, would you fight to keep them in the company? And if the answer is no, then they probably should not be on your team, like you really should have such a high bar for what it means to be on the team. And I think we’ve got an amazing, amazing team and it’s by far and away the biggest factor for any company’s success.

Andrew: All right. The interview is over, otherwise I would actually have gone into Glassdoor and checked on that. For some reason, I can’t allow anyone to get . . . in regular conversations you could say whatever you want. I’m never fact checking, I never get into that, but I have to look online. I do think it’s kind of impressive that these fricking people go back to Google Maps and tell Google that they had a good experience buying a key. Who does that? But they do it.

Greg: 2,000 people for us.

Andrew: All right. The big thing that I took away from this interview was, frankly, usually it’s like a business lesson. In this case it’s, “Hey, there’s another way with this key situation. I don’t have to worry about it so much. Just take a fricking picture and move on.”

It’s key.me for anyone who wants to go check it out, key.me.

And I want to thank my two sponsors who made this interview happen. The first is, look, if you’re looking for PR you should do what so many other businesses do, which is hire a PR agency. But the fact of the matter is, a PR agency is going to be too expensive and you’re not ready for it. So what you could do instead is get justreachout.io. They have helped so many other people I’ve interviewed, so many people who have listened to Mixergy interviews get publicity and go check them out at justreachout.io/mixergy.

And if you want your website hosted right, go check out hostgator.com/mixergy.

And finally, Greg, on a personal note here, I’m going to be running a marathon on every continent and interviewing entrepreneurs all over the world as I do it. If you want to see where I am and how I’m doing this, go check out runwithandrew.com. I’m super proud of that, Greg.

Greg: Wow, that’s awesome, congrats.

Andrew: Yeah, man. Thanks.

Greg: Thanks for having me.

Andrew: Sorry?

Greg: Thank you for having me.

Andrew: Thanks for being on here. Thank you all for listening. Bye, everyone. Go build.

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