Even a millionaire has his demons
Cliff Stanford, pioneer of low-cost Internet access, is a rich man but not a smug one. Andrew North met him
Monday 15 January 1996
Mr Stanford, a portly man with greying hair and a quick, direct manner, is not complaining, though. He was a disciple of the Net long before he set up Demon, the first low-cost dial-up service provider in Britain - indeed, long before most of us had even heard of the Net. "It's always been my hobby and what I've enjoyed most," he says.
But to treat Mr Stanford as a hobbyist or "techie" is to misunderstand him. He has little sympathy for those who want to keep the Net as an elitist club. "The techies will find something new. Nobody's hobby now is fax machines," he says dismissively. That last comment is the key to his thinking: Mr Stanford wants everyone to have access to the Net, so that it becomes as important as the television and the telephone, and he wants Demon to be one of the key providers of that access.
Demon already has a head start. In the three and a half years since he founded the company with Giles Todd, now the technical director, it has become Britain's, and possibly Europe's, largest dial-up Net provider. It now boasts more than 50,000 subscribers and a local access network that covers the whole of the UK. Unlike other much-hyped Net companies, Demon is also making a healthy profit.
Mr Stanford started Demon in 1985; it was Demon Systems then, just another software company. But when in the early Nineties he heard that Pipex had started offering leased-line Internet access for pounds 20,000 a year, he decided it should be possible to go to the other extreme, offering an individual dial-up service for pounds 10 a month. "Internet for a tenner a month" has subsequently become the company's unofficial motto. "That was what we really pioneered," he claims, "low-cost access."
Demon was born in May 1992 with 200 subscribers, eight modems, a few phonelines and a Net feed leased from Pipex. Its modest aim was to gain 400 subscribers in six months and perhaps 1,000 in two years. At that stage Mr Stanford did not intend to give up the software business. But events rapidly overtook him. Suddenly, the Net became trendy and his fledgling company was inundated with wannabe Netsurfers. In 1993, the World Wide Web emerged and Demon headed towards the stratosphere. In the past year, the number of accounts has been doubling every five months.
This deluge of subscribers, however, nearly spelt doom for Demon. Its network became hopelessly overloaded, and it could not install modems fast enough to ease the pressure. By this time last year, the situation was becoming so serious that many subscribers were thinking of leaving. It has required the installation of more than 4,000 modems to get on top of the growth problem, but Mr Stanford knows he cannot afford to be complacent. "We have just ordered another $2 million worth of modem equipment to cope with the next stage of our plans," he says. To fund this, investors recently stumped up pounds 5.5m.
The main concern now is meeting staffing needs. Mr Stanford confesses he is desperate. The company is looking to double its staff to 300 over the next six months, in preparation for its next phase - the assault on Europe. A Demon office has opened in Amsterdam and Mr Stanford expects to have a full nationwide local dial-up service operating in France "within the next six months". By the end of 1996, he hopes to be able to offer access to Demon across most of Western Europe, "either for the price of a local call or at no more than national rate". His ambitions do not stop there. He is talking with Agis, a bulk US Net provider, about establishing a local dial-up network in the US.
Just as important in the short term as developing a large and efficient network is making the Net more accessible to the average, non-technical punter. Turnpike, a more user-friendly software package for Windows users, has just been released and a Mac version is set to follow. Then there is ISDN, "the next big thing", he believes. The increased line capacity will allow connect times of just a few seconds - like radio or television - crucial if the Net is to win over people who expect to get their particular indulgence at the click of a button.
The World Wide Web is changing so fast that not even Mr Stanford will hazard a guess as to how it will eventually work or what it will provide. But he knows he cannot be complacent. Mr Stanford fought off a takeover bid from Netcom of the US last year. Other Net companies are snapping at his heels, although he dealt with one competitor, Cityscape, earlier this year by doing what Netcom had sought to do to him. But it is Microsoft that he sees as the most potent long-term threat to Demon's prospects in the dial-up Net market.
A home-grown behemoth - BT - could also trample all over Demon if the Labour Party has its way at the next general election. Labour's "deal" with BT could be seriously destabilising, Mr Stanford complains. "If Tony Blair does what he seems to want to do he will make BT dominant in every possible communication market."
Against this uncertain background, it is perhaps not surprising that Mr Stanford is in no rush to spend his new-found wealth. His 53 per cent stake in the company is now worth over pounds 14m, but "I'm still driving the same 18-year-old car and we still live in the same flat." The history of new technology is littered with the stories of people who got there first and seemed to be controlling the new wave, but who then sank out of sight, leaving the latecomers to cash in. It is too early to say whether Mr Stanford is going to escape that demon.
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