Unlike dimly lit old-school arcades, walking into Duck Entertainment feels fresh, bright and happy. Decked out in yellow lights and cute duck mascot logos, this new-school arcade located along Diffley Road in Eagan has drawn huge crowds since its grand opening on New Year’s Day.

So, what makes this place so unique? It specializes in just one beloved arcade game – the claw machine.

Inspired by so-called “clawcades” that are popular in Japan, China and Thailand, owner Zhengui “Z” Lin, 24, decided to open one in Minnesota. This young entrepreneur turned to Sunrise Banks to turn his first business idea into what has become a huge hit for visitors of all ages.

Being the Boss

Lin (pictured left) first caught the entrepreneurial bug during the COVID-19 pandemic when he started reselling items on Amazon.

“I enjoyed working for myself and working when I wanted to,” he says. “I liked being my own boss.”

For his first small business, Lin wanted to do something unexpected. That’s when he turned to the idea of the clawcade.

“There’s nothing like this in the whole Midwest,” says Lin. “There are some smaller ones, but they’re not as big and they don’t have a theme. We wanted to build it around a theme like similar places in Asia. Our theme is the duck mascot with bright yellow lights everywhere, yellow everywhere.”

How the Clawcade Works

Lin filled Duck Entertainment with 100 modern claw machines, stocked with a variety of plushies, toys, snacks and accessories. Visitors buy tokens, then use them to play the machines. They can then either keep the prizes they’ve won or trade them for credits to get other popular prizes, like Pokémon, Labubu figurines or “blind boxes” – boxes with a mystery prize inside.

Lin says it’s fun to see people of all ages testing their luck.

“People thought it was going to be more for kids than adults visiting,” he says. “But there are actually more adults that show up.”

Duck also sells an assortment of Asian-inspired refreshments, including bubble tea and Korean shaved ice.

Funding the Concept

Lin says securing both funding and a location were challenging in the beginning.

“There wasn’t really a way to test this concept because it was so new,” he says. “So, it was really hard to get a loan.”

After a recommendation from another bank, Lin met with April Rouse (pictured left), a commercial lending officer at Sunrise Banks.

“Z had a solid business plan and projections when he came to Sunrise Banks, along with the drive to open the business,” says Rouse. “I was very impressed with his entrepreneurial skills, and at such a young age. Z is such a go-getter!”

Rouse set Lin up with both an SBA loan and SBA line of credit to get Duck up and running.

“April reassured me that our application and business plan looked good and that we’d get approved,” Lin says.

Lin says it also took a while to find a location because landlords didn’t fully grasp the concept.

“They thought we were going to use super-old claw machines,” he explains. “They were like, ‘You’re going to put 100 of those in one building?’”

Eventually, he found a prime site in Eagan, close to businesses and three schools. Lin says many kids come after school or on weekends to play the machines.

Keeping Up with Demand

A long line of customers greeted Lin on New Year’s Day, when Duck Entertainment first opened its doors. That’s thanks, in part, to hype on social media.

“There were people that lined up at 5-6 a.m. and the line went around the building,” he says. “I was not expecting that.”

Lin even had to close Duck temporarily because he ran out of prizes – he went through about two months’ worth of inventory in just three weeks. Getting new prizes from overseas took a few weeks, due to Lunar New Year and other shipping delays, but he was able to re-open in mid-February with minimal impact to his bottom line.

Eventually, Lin would like to turn Duck Entertainment into a franchise opportunity. Right now, he’s focused on keeping the momentum going.

“Sunrise Banks loves the opportunity to help businesses grow and to build relationships,” says Rouse. “Z is the perfect example of this.”

Want to learn more about financing your small business? Visit sunrisebanks.com/sba to get started.

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This article originally appeared in the Minneapolis/St. Paul Business Journal.