Editorial Notebook

September 25, 2004|By Robert Benjamin

AVERY MODERN cautionary tale:

A young man gets hold of a better mousetrap. The world beats a path to his door. His mousetrap becomes the gold standard for consumers. An international conglomerate buys his family out for $50 million. And then one day someone jams a Bic pen into his mousetrap, rendering it useless, and lets the wide world know about his simple trick on the Internet. Within days, decades of success - of building up, quite literally, an impregnable brand - are under siege.

In essence, that's precisely what happened to the Kryptonite lock company over the last two weeks - a course of events that says a lot about the new challenges for manufacturers of retail products when the world turns at Internet speed and about the easily shattered illusion of security in these times.

Kryptonite, of course, is the only known material stronger than Superman. It is such a perfect name for the line of expensive, heavy, U-shaped and usually very reliable locks that a young enthusiast began selling in the early 1970s out of his VW van to Harvard students. More than a million bikes are stolen each year in this country; serious bicyclists - particularly big-city commuters and couriers who rely on them for a living - can be obsessive about finding ways to defeat the legions of bike thieves.

And Kryptonite's design did the job best - so much so that the company has been offering as much as $3,500 if a bike is stolen while locked with one of its registered products. It even designed locks for the New York City market, where thieves are so relentless they at times have resorted to digging up street signs to which bikes have been locked. The company's slogan: "Tough locks for a tough world."

But on Sept. 12, its world got tougher: A San Franciscan who had just had his bike stolen stuck the hollow cylinder of a Bic ballpoint into his Kryptonite lock's circular keyhole and found it was strong enough, yet pliable enough, to pop the lock open. He immediately posted a warning on an Internet bike forum: "Your brand new U-Lock is not safe!" For avid bicyclists, as one bike store owner put it, that was like finding out Kleenex is bad for colds.

Within days, various videos of less-than-30-second "lockbiccings" were also on the Internet, along with chatter about other companies' locks and vending machines and computer locks similarly falling prey. Many retailers pulled suspect Kryptonite locks off their shelves. And the Canton, Mass., company was suddenly and thoroughly on the defensive.

For Ingersoll-Rand, the giant that bought Kryptonite in 2000, this crisis does not involve a huge amount of money; Kryptonite accounts for less than 1 percent of its $10 billion in annual sales. But the Kryptonite brand, synonymous with security, is extremely valuable; the conglomerate has begun extending its technology to its many industrial products, such as its Bobcat brand of construction equipment.

And so Kryptonite had little choice this week but to offer affected lock owners free Bic-proof locks - a move that could cost millions of dollars. "At Kryptonite, we understand the responsibility that comes with being a market leader," the firm's general manager said in a formal statement.

But there remains some grumbling, including at least a few class action lawsuits already filed. Kryptonite had been rolling out a different kind of lock that turns out to be pen-proof, while still touting other, now-useless locks. The rumor mill churns: What did Kryptonite know and when?

For the most part, however, Kryptonite's response was viewed as honorable and met with relief. But still, an aura of invincibility may be broken, a gold-plated brand tarnished, and a sense of security - for those who relied on it - punctured. All with the stroke - no, jamming - of a pen.

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