Smartphones are boosting demand for hot spots. DragNFly CEO chases those opportunities from Manhattan to the State Fairgrounds.
Anyone with a smartphone or tablet computer knows the drill: When you need a fast connection to the Internet, you find a Wi-Fi hot spot.
That's fine with Duran Johnson, the well-traveled president of DragNFly Wireless Inc. of Eden Prairie, who puts free Wi-Fi hot spots in restaurants, athletic clubs and shopping centers, and this year will provide free Wi-Fi at the Minnesota State Fair.
Last week, Johnson was in midtown Manhattan visiting a customer -- Equinox -- an athletic club chain that offers DragNFly's Wi-Fi service free to its customers. Never afraid to hustle business, Johnson's nine-year-old company made a bid to install Wi-Fi at the Minneapolis-St. Paul International Airport earlier this year. He was passed over for a Miami firm with previous airport experience. But that unsuccessful bid caught the eye of State Fair officials, who agreed to have DragNFly provide a free Wi-Fi hot spot near the grandstand for fairgoers.
Johnson's hope is to ride a wave of Wi-Fi popularity, driven by mobile devices, that some analysts say will boost the number of public Wi-Fi hot spots tenfold in the next four years. Chris DePuy, a wireless analyst at the Dell'Oro Group in Redwood City, Calif., is predicting Wi-Fi hot spots worldwide will jump from 750,000 in 2011 to 9 million by 2016.
Of course, DragNFly isn't the only company offering Wi-Fi hot spots. Telecommunications giant AT&T offers Wi-Fi service at 25,000 locations, Wi-Fi firm Boingo Mobile operates 325,000 hot spots worldwide and USI Wireless of Minnetonka provides citywide Wi-Fi service in Minneapolis.
Johnson's seven-employee firm specializes in installing and managing Wi-Fi hot spots for retail and other companies that use the service to draw customers and promote discount offers.
"I've always pushed to make Wi-Fi free to get people to come in," Johnson said.
Some local retailers say the strategy works.
"Wi-Fi used to be an amenity, and now it's a necessity," said Liz Ostrander, senior marketing manager for Rosedale Center, a DragNFly Wi-Fi customer for about four years. "With the increase in the number of smartphones and wireless tablets, we see a lot of people doing business in the food court. It's like a mobile office." Rosedale will extend the reach of the Wi-Fi to the entire mall and its adjacent outdoor plaza by year's end, she said.
Randy Parmley, the owner of Crumb Gourmet Deli in Eden Prairie, has sold more food because he has the DragNFly Wi-Fi service, but he says that's not entirely the point.
He got in early
"If you're a fast-casual restaurant and you don't have free Wi-Fi, you're automatically losing customers," he said. "With the growth in tablets and smartphones, everybody expects to have Wi-Fi access with good speed."
Part of DragNFly's success may be attributable to the 40-year-old Johnson's outgoing personality. Armed with a degree in accounting from the University of South Dakota, he worked in corporate information technology and sales before deciding to start his own company.
"Duran's great to work with," said Ostrander of Rosedale. "If we have a problem, it's fixed within the hour."
Johnson started DragNFly in 2003, when the technology was still new to most people. Today it has more than 50 installations in the Twin Cities and more than 500 installations in 42 states, all managed out of a data center in the Twin Cities, he said. The privately owned firm doesn't disclose earnings or revenue.
Johnson has spent a lot of time on the road since 2003, meeting with national retailers. During that time, corporate thinking about Wi-Fi has switched from the idea that consumers should pay retailers to use their Wi-Fi to the notion that retailers should offer free Wi-Fi to draw customers, he said. But even now, Wi-Fi hasn't caught on everywhere.
"There are brand-name chains of restaurants where local franchisees are doing Wi-Fi on their own because corporate isn't helping them," Johnson said. "The number of locations that still need Wi-Fi is unbelievable."
For Johnson, every little bit of publicity helps, because many regular users of DragNFly's Wi-Fi don't know they're on the service. At clients ranging from Crumb Gourmet Deli to most of the 105 athletic clubs operated by Chanhassen-based Life Time Fitness, the Wi-Fi service is branded with the name of the business rather than with DragNFly.
"We can definitely provide DragNFly with exposure to a wide audience, almost 1.8 million people over the 12-day run of the fair," said Renee Pearson, the fair's deputy general manager for entertainment and marketing.
A small but growing number of fair visitors request Wi-Fi each year, Pearson said. In the past, the fair provided only vendors with Wi-Fi service, but last year it quietly offered free public Wi-Fi around its information booths.
"This is the first year we're publicizing that Wi-Fi's available," Pearson said.
Johnson's marketing pitch to clients is simple: Not only does providing free Wi-Fi satisfy consumers, it also can be a marketing tool. He provides clients with monthly statistics about how many people use the Wi-Fi, how long they are connected and how much data they download or upload. The report also tells clients what device consumers are using to access the Internet, such as an iPhone, iPad, BlackBerry phone, e-reader or PC.
The report to clients doesn't try to identify users or what they downloaded.
"I'm little brother, not big brother," Johnson said.
It will be only slightly different at the fair, where Wi-Fi users will be required to provide their postal ZIP code and age to log in. (Johnson said he'll provide the demographic information to the fair for free in exchange for the public exposure.)
The reports allow clients to track customer behavior, get customer feedback and schedule promotions for peak periods of use. For example, clients can offer discount offers on the name-branded Web page consumers see when they log on to the Wi-Fi service.
Johnson charges single location customers $25 to $50 a month, plus a set-up fee of $75 to $125. Shopping centers typically pay $100 to $200 a month. The Wi-Fi equipment is free for the life of the relationship with DragNFly.
Wi-Fi download speeds vary, depending on the capacity of the client company's Internet connection. For small businesses, the speeds can range from 1.5 megabits (million bits per second) to 6 megabits. At the State Fair, the download speed will be 40 megabits, Johnson said.
Steve Alexander • 612-673-4553