When a 10-cent pen brought a company to its knees.

Author: Michael Woldhuis

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Hindsight is a beautiful thing, especially after the proverbial has hit the fan.

The Case Study below poses the question, could Kryptonite Locks have prevented the short and long-term damage to the company and its reputation if they had been listening to Social Media and had a Risk Mitigation plan in place?

A single forum post saw a bike lock that millions of cyclists had trusted with the security of their bicycles for over 40 years rendered useless by a 10-cent plastic pen. The backlash that ensued cost the lock company $10 million in replacements, and damaged it’s reputation so much that the company still hasn’t fully recovered almost 8 years later.

The Kryptonite lock, designed in the early 70’s revolutionized biked security. Prior to the invention of the patented Kryptonite U-shaped tubular-key lock, cyclists had to rely on heavy, case hardened hexagonal linked security chains, which could easily be breached by a low cost bolt cutter to secure their bicycles.

In 2004, rumours surfaced that the state-of-the-art Kryptonite Lock, that was at the time, and to this day still owned by Ingersoll Rand  could be unlocked, or cracked by a plastic ballpoint pen.

Chris Brennan, outraged that his $50 Kryptonite lock could be compromised by a simple cylinder shaped piece of plastic was the first to post a warning of the product fault on the popular cycling forum BikeForums.net, under the thread title “Your brand new U-Lock is not safe”. Soon after instructions on how to crack the Kryptonite lock were posted online, several videos surfaced online of people putting the steps outlined in the original post into action on a range of Kryptonite locks. Some of Kryptonite’s most lauded locks that claimed to be resistant to bolt cutters, hammers and saws were found to be susceptible to the plastic pen key product fault.

News of the product fault quickly became a popular topic for blogs, and within forums around the world, till eventually the story of the impenetrable lock that could be unlocked by a plastic pen reached one of the world’s most popular blogging sites, Engadget.  Shortly after appearing on Engadget, news of the product fault was published in the New York Times, and it was at this point when the “Blogstorm” and outrage surrounding Kryptonite hit its peak.

Even as the controversy around the company increased online, Kryptonite remained silent; it was not until a week after the original post was published on BikeForums that Kryptonite addressed the situation publicly.

With outrage escalating, the statement issued by Kryptonite did nothing to quell the situation, the company claimed that the lock would still act as a deterrent to thieves, and that they were working on an improved model that was be released for sale at a later date.

With Kryptonite not offering any remedy to the problem, or expressing any sympathy to the 100’s of 1000’s who had purchased locks susceptible to the fault, the backlash directed at the company escalated even further.  Bloggers intensified their verbal assault on Kryptonite, and angry Kryptonite owner’s bombarded forums and media sites with comments criticising Kryptonite’s lack of compassion and action on the issue.

It was not until 10 days after the original post was posted that Kryptonite announced it would replace 100,000 Bic-pickable locks, at a cost to the company of $10 million.

The way in which Kryptonite reacted to the situation saw the company awarded with Business 2.0 Magazine’s Dumbest Business Moment of the Year Award in 2004.

The incident is also credited alongside the footage of Dominos Pizza employees disgustingly tampering with customer orders, and the “United Breaks Guitar” video as online videos that forced businesses to change how they view and use social media.

Donna Tocci, the Public Relations Manager for Kryptonite recently claimed that the company was well aware of Chris Brennan’s post and the storm of criticism that ensued, but chose not to react until a reactive plan was agreed upon.

Doubts surround the claims that they were monitoring social media at the time, due to the company failing to formally acknowledge the problem until after news of the fault appeared on mainstream media, leading many to believe they were blissfully unaware of the actual size of  situation prior to the Engadget and NYT articles.

If Kryptonite had actually been aware of the situation that had developed online, they would surely have reacted, or acknowledged the issue sooner than they did.

If a Social Media Monitoring plan had been implemented correctly, Kryptonite would have identified the original post, as well as the subsequent conversations that occurred immediately following Brennan’s post. They would have realised that the situation was escalating quickly, and that they had to address the situation sooner rather than later, to limit the damage to their company and their reputation.

If Kryptonite had acknowledged there was a problem and communicated that they were working on solution sooner, they could have prevented the tide of negative sentiment that eventually caused the story to hit mainstream media.

Could this be you? Are you actively listening to the community around your products and competitors? Do you have a risk mitigation plan in place? Situations like this are not a quick fix and can drag on for years.

If you type “Kryptonite Locks” into Google right now, of the top 10 results, two will be Videos of people breaking into Kryptonite locks, and the result that would come directly after Kryptonite’s Wikipedia page will be an article that was published on Wired, called “Twist A Pen, Open a Lock”. Eight years on, Kryptonite is still struggling to recover from the “Bic Pen” fiasco.

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