Might document shredding become next Coinstar?

  • By Kurt Batdorf HBJ Editor
  • Tuesday, August 21, 2012 11:24am

LYNNWOOD — Stephen Hershman got serious about shredding documents after his identity was stolen in 2004, but he wore out a few personal paper shredders before he thought about finding a better way.

In 2007, Hershman, 34, and Keith Rettig, 44, co-founded a document shredding venture they called The Shred Stop. Hershman patterned his idea on Fotomat booths that dotted shopping center parking lots in the days before one-hour film processing and digital photography: Drive up, drop off, pay a fee for shredding.

They got as far as a building design but couldn’t find land, Hershman said.

A call in 2008 to Brad Haggen, vice president of new business for Haggen Food and Drug, proved timely and helped Hershman and Rettig realize that a self-contained, self-service kiosk about the size of a vending machine might appeal to grocers by getting new customers inside.

In April 2009, they installed a prototype kiosk in Haggen’s Top Food and Drug in Edmonds.

First lesson: Shredding expands paper by a factor of 10, which shocked Hershman and Rettig. The kiosk’s 12-cubic-foot hopper filled in as few as 23 minutes, which meant that Hershman, who lives close to Top Foods, was at the store several times a day emptying the kiosk’s paper into a 6-cubic-yard recycling dumpster.

“I couldn’t take a vacation for a year,” he said.

By summer 2009, Hershman and Rettig were working on a more robust kiosk design — one that held 27 cubic feet of paper and addressed user experience issues. With the success of the kiosk in Edmonds, Haggen agreed to put Shred Stop kiosks in five more of its stores in Snohomish and King counties.

A year after the Haggen expansion, Hershman and Rettig were designing a kiosk that included a compactor when they found a silent partner who was a former executive with Iron Mountain, a Boston-based document shredder. Now The Shred Stop contracts with Iron Mountain to collect its kiosks’ paper. That partnership allowed The Shred Stop’s recent entry into six Seattle-area Safeway stores.

Rettig engineers the software and Hershman handles the hardware. They assemble the kiosks from U.S. components. The shredder comes from Michigan. Elpac in Mukilteo makes the electrical panels and wiring connectors. Bowman Manufacturing in Arlington assembles the kiosk frames and won Shred Stop’s business after reading about them in the August 2009 Snohomish County Business Journal.

“The Business Journal is responsible for creating jobs with that original story,” Rettig said. “It’s nice to have all the manufacturing done locally.”

Shred Stop has 12 kiosks in Snohomish and King counties and two in Portland, Ore. Hershman and Rettig’s near-term goal is to get to 200 kiosks, with a long-term goal of 5,000 to 10,000 kiosks. Think Coinstar, for document shredding, Hershman said.

“We want to get people to stop using home shredders,” he said.

Kurt Batdorf: 425-339-3102; kbatdorf@heraldnet.com.

Learn more

Find a Shred Stop kiosk and see its real-time status at theshredstop.com. Shredding costs $2 per minute and a box of paper takes about five minutes to shred.