Jason Johnson has a bone to pick with the lowly door key.
The CEO of electronic door lock maker August describes keys as being “really kind of annoying” in today’s digital age. In contrast to spending hours on their smartphones, people generally use their keys only once or twice a day.
Still people keep their keys on them, despite the discomfort of stuffing them in pockets, Johnson said. That is, of course, if they don’t lose them—another problem with their small size.
“Metal keys are very anachronistic,” Johnson said. “You just don’t need them anymore.”
His solution is smart locks, Internet-connected gadgets that are wired to open and close doors using a smartphone app. By spending a little extra money on another Wi-Fi accessory, August’s customers can also use their smartphones to remotely open doors for their dog walkers or plumbers so they don’t have to be at home to let them in.
It’s a convenience that’s worth the significantly higher price for August’s locks, Johnson believes. His company’s original locks cost hundreds of dollars, or several time more than traditional door locks, and mostly appealed to tech savvy users with a lot of money.
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On Tuesday, August hopes to push into the mainstream by debuting its two cheapest locks yet. The August Smart Lock Pro, which costs $279, comes with the Wi-Fi device (normally sold separately for $80) for opening doors remotely; this bundle is cheaper than before when people had to buy the two products separately. Meanwhile, an updated version of the flagship August Smart Lock is also now available for $149, $80 less than the previous version of the same model.
Both versions come with August’s Door Sense that alerts people through their phones when their doors have been opened or closed. Additionally, August is selling a newer version of its web-connected security camera, but the price for that device will remain at $199.
The lower price for the company’s smart locks is intended to lift sales, which Johnson declined to disclose. But he said that people in “the major metropolitan areas are the biggest buyers,” suggesting that August’s smart locks aren’t selling as well where disposable incomes are lower.
“This is us going bigger, going wider,” Johnson said.
Johnson said that Walmart CEO Doug McMillon “has tried to educate me” about the buying habits of mainstream consumers with less money to spend. A product that sells for over $200 risks turning off average consumers who may not be used to spending big bucks on things like web-connected doorknobs, no matter how interested they may be, Johnson explained.
It may seem obvious that cheaper prices mean more mainstream customers, but it’s apparently something McMillon had to learn, especially as the company eyes a bigger market. August’s various locks and product have earned good reviews, but it seems like its high-price has deterred some would-be buyers.
“When you get closer to $100, it is something people can try,” Johnson said.
Even with its earlier locks, August had convinced retail giants like Walmart (WMT), Lowe’s (LOW), and Bed Beth & Beyond to sell it products. That will continue with the latest versions of August’s products.
As part of its push into cheaper locks, Johnson said August is trying to lower its costs including reducing the manpower needed to assemble its products, presumably through various automation technologies. But the company still spends big on product development, and it hasn’t cut overhead like the expensive customized, Japanese motors used in its smart locks.
Johnson did not say whether his company is profitable or what impact selling cheaper locks will have on its business.
August received $25 million in funding in July that it’s using to help it debut its new products and expand to more retail and online stores like AT&T’s various shops, Johnson said. Some of August’s investors include Bessemer Venture Partners, Comcast Ventures, Qualcomm Ventures.
Although August has previously created commercials for its smart locks, it plans on “going bigger” with marketing this time, Johnson said. Over the next few weeks, it will buy commercial time on TV networks like CNN.
Still, it’s unclear whether mainstream consumers can be convinced to buy August’s new smart locks, even with the price drop. After all, a conventional door lock can still cost less than $20.
As for the metal keys that he rails against, Johnson still keeps spare copies at his home.
“I’m still a believer that you should have a key as a backup,” Johnson said. “It’s a fail safe.”
