Demon and Redbus
How Cliff Stanford used new ideas to launch two businesses
After selling Demon Internet for £66 million, Cliff Stanford launhced Redbus to fund business innovation. He tells startups.co.uk about the importance of good ideas Name: Cliff Stanford Age: 45 Business: Stanford’s initial business Demon was the first European internet provider, his current business involves seed venture capitalism Business Names: Demon, Redbus Amount of employees: Demon: 530, Redbus: around 300 across all companies
What made you take the plunge and startup your own business? Demon: The idea for Demon Internet rose out of a discussion which took place on a conferencing system called Compulink Information eXchange (CIX). Pipex was offering a leased line service for £20,000 a year and I realised that there was a demand for the ‘internet thing’ beyond the academic world. I posted a message on CIX and received an overwhelming response that indicated that the idea of providing low cost, desktop access to the internet was worth pursuing. Redbus: Having started Demon, I was aware of the difficulties of raising funding for such ventures. I decided to put some of the money I made from the sale of Demon, back into the investor community and help others start their businesses just as I had done.
Where did you get the funding to start your business? Demon: I used my own funds for Demon, Redbus was set up with the proceeds of the sale of Demon Internet to Scottish Telecom (now Thus) for £66 million. I personally gained £30 million.
How much did it cost to start your business? Demon: £20,000 Redbus: £15 million
At what age did you decide to go it alone? 38
Where did the idea for your business come from? Demon: It started more as a club for friends and colleagues to gain access to the internet and was the first company to use its name in email addresses. It began with 200 subscribers, eight modems, a few phone lines and an internet feed from Pipex. During my time at Demon Internet, I saw too many good ideas go to waste as a result of a lack of business experience and financial backing. The UK in general has suffered from a lack of courage in backing innovative concepts and business ideas, especially in these difficult economic times following the bursting of the dotcom bubble. In the first couple of years, Redbus received around 8000 ideas, which was testament to this belief.
How long did it take from your startup idea to your first day trading? Demon: 8 months Redbus: 8 days
Did you have help from friends and family? Not financially but when I started Demon my mother did our bookkeeping initially and kept a note of all the subscribers in the back of a diary. When this very quickly filled up, I realised I had a viable business.
What academic qualifications did you get? I got a grammar school education and went straight into accountancy.
What jobs did you do before you started your own business? I was an accountant until 1979 and then ran a software house called ImPETus.
Did they help you? No, I started Demon Systems myself when ImPETus software became outdated.
Did anyone offer you help that proved to be particularly useful? Tony Mudd, the accountant I worked for (and who later became the Chair of Demon) thought the idea for Demon was excellent and that it would make me a millionaire. Since he had already built his own company and made it successful, the advice he gave me was extremely useful and motivating.
What’s the single most important thing that helped your business succeed? A combination of luck and judgment
What skills and personal characteristics do you need to start your own business? The ability to know when to take risks and when not to and to get it more right than wrong. The ability to see the light at the end of the tunnel – where the revenue will come from. Companies set up to run at a loss will not succeed in the long run.
How many hours a week do you work now? Around 50
How many hours a week did you work when you started? Around 100
What has been your main business problem? Finding funding when it’s really needed – the reason behind setting up Redbus.
Was there ever a time when you thought you were close to failing – and what did you do to overcome that? Several times. I bullied, begged and cajoled the investors.
What is your top tip to anyone wanting to startup his or her own business? Don’t, unless you’re really sure you want the heartache.
Is there anything you would do differently today? No
Where do you see your business in a year’s time? No idea. We try to stay about six months ahead of technology in order to react to where it’s going, which is important .
Are your main ambitions financial (to make a lot of money) or lifestyle based (to enjoy what you do)? To make money, but I also enjoy investing in promising business ideas from people who have tried all the usual avenues and been turned down.
Would you start another business? Yes. And do so around six times a year.