Captivate Networks: how Four Critical Decisions Shaped One Firm’s

Path to GrowthAnthony

Liisi

1996 – First idea of CaptivateWhat if you put flat-screen displays inside elevators so people had something to watch while waiting to read their destination?

2011 – Network of 10,000 office elevator displays across North AmericaSeen by 4 million smart, busy, upscale professionals on the move and struggling “to do it all”.

Critical Decision 1Are We a Technology Company or a Media Company?

Licensing the technology to an elevator company?

Who is the audience?

A company must also focus on how its technology creates value for the end user

To assemble sufficient data to persuade building owners to install flat-panel displays in their elevators and advertisers to pay to run ads on the displays.

Critical Decision 2 Should We Hire Nielsen Media or Do Our Market Research?

No one a had ever placed flat-panel displays in elevators before, so how effective the advertising would be?

Nielsen wanted $200,000. Credibility Vs Cost.

Preliminary research by Captivate: average income of $100,000, Professional & Managerial hard to reach through traditional media.

To be armed with verified, unbiased data to support his business concept.

Critical Decision 3Should We Take Otis’s Offer? To partner with the largest elevator company?

Market share? Is 25% enough?

Who are the customers?

To be an exclusive provider of flat-screen displays.

Not allowed to install its systems in any other elevators.

All of the market share

As media company, building owners and advertisers were primary customers.“ Here we were. We had no revenue, very little funding,

a cool technology, and an idea. And here’s the largest elevator company in the world that wants to partner with us, and we said “No”. ”

Critical Decision 4Should We Give the Building Owners a Cut of the Profits?

To provide building owners a service?

Development of its business model, and how much its revenue it should share with its partners.

To feel like they were a participant in its business rather than just bystanders.

Present-Day Growth PathTragic events of September 11, 2011.

More and more popular

Demand is increasing

To pass safety information in times of emergency

Purchased by Gannett in 2004

Question 2Why do you think that Captivate has

been able to sustain its growth? What, if anything, will eventually slow the growth of the company?

Question 2No competitorsAudience: on-the-goal professionals3.7 million peopleDivision of Gannett10 000 elevator displays1000 office buildings39 million ads

What will come next?

Question 3Of the day-to-day challenges of

managing growth discussed in the chapter, which of the challenges do you think were the most difficult for Captivate to deal with during the firm’s early years?

Question 3Cash Flow Management

Nielsen Media researchVery little funding, no revenueCut of the profits to building owners

Price Stability – no competitors to fight with

Quality Control

Capital Constraints

Question 4Why do you think Gannett

purchased Captivate?

Question 4Gannett: US newspaper companyNewspapers + InternetHow to advertise moreLogical solution

Question 1 + Application Question 1Which of the four decisions

discussed in the case do you think was the most difficult? What would have happened to Captivate if it had made the opposite decision in this circumstances?

How do you think Captivate would have evolved if DiFranza and his team had seen the company as a technological company rather than a media company?

Which of the four decisions discussed in the was the most critical?Critical Question 1: Are We a Technology Company or a Media Company?

2)No need to hire Nielsen Media

3)Would had taken Otis’s Offer or offered licensing the technology

4)No profits to the building owners

How would Captivate have evolved if Difranza had seen the company as a technology company rather than a media company?

Microsoft (technology company)

Captivate (if technology company)

Focus on developing new technology (new software every year or 2 years)

Licensing to computer maker companies

To look for new support to develop the technology (from computer to smartphone)

HD & 3D flat-panel displays

To look for other places where people are “captivates” i.e waiting room, airport…

Not as big as today and would not had being purchased by Gannett

Application Question 2Think of your professional life as a

student or as an employee, if you currently have a job. List four major decisions that you made that have put you on the track that you’re currently on. Reflecting back, would you change any of the decisions that you made? If so, why?

Liisi’s questionsWhere to go to study – Tartu or Tallinn?What to study – economics vs mathematics?Start working while still studying?Go to abroad? Where?

Anthony’sShould I change field of study? To stay in science or to go in business?

To stay in my hometown or to leave for the capital city?

To pursue a double degrees or to have more work experiences?

To stay in France after my French university reject my application for 2nd year of Master degree or to go study in Taiwan to have a Master degree?

High school diploma specialized in sciences Family owns a grocery-chain

Hometown: To take care of the family as the eldest but no Chinese class and limited awareness of globalization

Capital city: To live alone, To adapt to a new environment

Double degrees: Rooms are limited, To be abroad at little cost, To make an international network

France: To work only in France, Bad economical environment (unemployment rate high, growth rate null)

Taiwan: To keep enlarging my international network, improving my Chinese, To build up time