Targeting a captive audience

Hopkinton's Mike DiFranza rides a Prudential Tower elevator with his Captivate Network. Hopkinton's Mike DiFranza rides a Prudential Tower elevator with his Captivate Network. (Patricia McDonnell For the Boston Globe)
Email|Print|Single Page| Text size + By Susan Chaityn Lebovits
June 22, 2008

M ike DiFranza broke into the media distribution business at the age of 10 delivering newspapers. By 12, he had his first friendly takeover, buying out his sister's route. Now, at age 46, the Hopkinton resident reaches more than 2.5 million people across the United States each day with his brainchild, the Captivate Network, small screens set inside elevators that carry news, sports updates, finance, and ads.

But DiFranza still remembers the tough days, like the time one venture capitalist looked at him during a meeting and said, "You quit your job to do this?"

It all started when DiFranza was working for Mentor Graphics, an Oregon-based company that creates computer software for engineers to design, build, and test electronics in virtual reality. Things were going well, and from 1984 to 1997 DiFranza went from technical support to sales and then to running the East Coast office.

During that time, the company sent him to Harvard Business School's management development program, which has executives attending classes six days a week, 12 hours a day, for three months.

"I remember the very first class at Harvard," said DiFranza. "They brought in a Wall Street banker who started calculating the 'weighted average cost of capital.' I had no idea what he was talking about and walked out of the first session thinking . . . I've finally gotten myself in over my head." But by the end of the program, DiFranza said, he and the other graduates felt like they could take on the world.

The next year DiFranza spent a good chunk of time flying back and forth to the West Coast. On each flight out he'd write down ideas for new companies he wanted to start, and on the way home he'd reevaluate them. After returning on a red-eye flight in August 1997, he got onto an elevator in the company's Waltham office building with three other people.

"The doors closed and the tension rose," said DiFranza. "People were looking at their watches, the floor numbers, and their shoes. I saw this and thought it was nuts - there was nothing to look at on the elevator."

It occurred to him that elevator riders would watch a TV displaying a dedicated network, which would offer an opportunity for advertising revenue.

"People take about six elevator trips a day with each one lasting about one minute," said DiFranza. "So they're in an elevator for six minutes a day, 30 minutes a week, 24 hours a year." He figured the minimum trip in an elevator takes 30 seconds, providing enough time for two 15-second ads.

He approached Todd Newville, an engineer at Mentor Graphics (who initially thought the idea was nuts), then spent the next few months writing a business plan. Late that year, DiFranza resigned from the company. A few weeks later, Newville followed.

Steve Collins, a longtime college friend, said he asked DiFranza why he chose to walk away from his successful career and take such a risk.

"Mike said that he wanted to pursue his dream of starting and managing his own business, and that people would be amazed at what they could accomplish if they believed in themselves," said Collins.

At the time, however, venture capitalists were primarily investing in Internet start-ups, and DiFranza struggled to raise money. "Eight months into it we were burning through our savings," he said.

So, DiFranza branded the company as "Internet in the Elevator" and went to news outlets that were beginning to launch websites, like The New York Times, The Boston Globe, The Chicago Tribune and CNN. They agreed to have their content run on one half of the screen for free, and advertisements, with no audio, would run on the other.

Eventually DiFranza was able to get his product on a meeting docket at a venture capital firm. When he learned the vote would take place the next week, DiFranza went into overdrive to get a prototype installed in the firm's elevator. The plan worked. The venture people saw the screen in action and loved it.

In 2004, DiFranza sold his company to a media giant, the Gannett Co. He stayed on as president and general manager. Captivate Network can now be seen on over 8,300 screens.

DiFranza is a self-proclaimed type-A personality. He grew up one of four kids in Everett and watched his father go to night school to become an electrical engineer. After five years managing his paper routes, he briefly worked in a drive-in theater picking up trash, then lied about his age to work at Massachusetts General Hospital delivering food trays.

"One of my first deliveries was on the psychiatric ward, where patients were behind a locked door, and I had to be buzzed in by a nurse," said DiFranza. "I brought the cart in and within moments someone climbed up on top of the cart. It was like a scene out of 'One Flew Over the Cuckoo's Nest.' "

After a year and a half he was promoted to chef's helper, doing prep work in the kitchen. He kept that job until he went to Northeastern University, where he majored in engineering and computer science, with a minor in electrical engineering. With three siblings in college, he needed to pay his own way, and decided to drive a cab.

"My strategy was to look crazier than anyone that I picked up, so I grew my hair out, had a big mustache, and wore glasses and a leather coat," he said.

He decided to ramp up his college courses and graduate six months early, in order to have an edge in the job market over the masses finishing in June.

His first job was with Metheus Corp., a computer graphics start-up. Then he went to Mentor.

DiFranza said his two children, Ashley, 16, and Zach, 14, grew up watching Captivate Network evolve from an idea into a company.

"They have better business skills than most business people," he said. "We'd sit around with my wife, Debbie, during breakfast and discuss the branding messages of Froot Loops."

But perhaps the best example of what can happen when you grow up with a father like DiFranza took place last month, when Zach wanted $150 for some baseball training equipment.

"He put together a sales presentation to convince me that the equipment would be a good investment for his future," said DiFranza. "He made a flip chart with graphs that showed the investment return, as he could possibly get a full college scholarship for baseball (a $160,000 savings), get into the pros, then would give me 10 percent of his first-year salary."

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