Demon computer buffs hit jackpot on Internet

The Internet fever currently sweeping the world has made another two UK millionaires.

Cliff Stanford and Giles Todd, who founded Demon Internet in 1992 when 100 enthusiasts recruited from a bulletin board in Surbiton paid pounds 120 each to share eight modems, have completed a private placement of shares that values the company at pounds 26.7m.

Demon now has 120 employees and 45,000 subscribers. At times the number of customers has doubled every five months. The growth is constantly outstripping Demon's resources.

The paradigmatic experience of a Demon customer (and I have been one since before there was a service) is to sit muttering imprecations at a screen where nothing is happening.

When their connection to the Internet is running fast, there are not enough phone lines. When they have enough phone lines, the line to the States is too slow. Yet the customers are as hard to discourage as lemmings.

The urge to surf the net swept people almost before there was a net to surf. The first Demon customers were supplied with software designed by a cryptographer for the delectation of radio amateurs.

This first software, now replaced by something much easier to understand, was utterly reliable. It was also utterly impenetrable. The happy heroic few who fought their way through to a connection with Demon were greeted with a screen that said "net ". That was all. It was like setting off to surf and finding that someone had drained the Pacific ocean.

Yet still the surfers poured in. The arithmetic was irresistible. For pounds 10 a month, plus VAT, Demon sold access to the whole world. Customers could e-mail 30 million of their closest friends, download dodgy pictures from universities all round the world and participate in endless discussions ,on world affairs to computer technology.

The popularity of these pursuits took everyone by surprise. Cliff Stanford, a former accountant who got into computers by programming his calculator, had expected 1,000 users by the end of the first two years. He had that many in six months.

Then the rise of the World Wide Web, software that makes the Internet useful and fun for normal people, made the Internet fashionable, and Demon was the only company in Britain aiming seriously at the private dial-up market.

Nowadays both BT and Compuserve, the giant American online service with more than 3 million members around the world, have their eyes on the private market.

But Stanford reckons growth will continue. "In five years there will be 12 million people on the net in Britain", he says. "That's the size of the fax market now; and people will be doing everything they do with faxes - like sending junk mail to clog up your inbox."