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A carefully managed take-off

Gareth Williams looks every inch the web entrepreneur: black shirt, jeans and enviable tan. Skyscanner's offices tick all the dotcom boxes too: prime location, wall-to-wall natural wood and smoked glass, video-game zone and a kitchen chock-full of free fruit and drinks.

Except this is Edinburgh's Princes Street, not Silicon Valley. And Skyscanner, the online flight search company Mr Williams co-founded just as the last dotcom bubble burst, has climbed to the number-two spot in its sector through careful and cautious growth, not boosterish hype. It now has 20m unique visitors a month, who together spend more than £2bn a year. "I remember when we boasted that everyone who used our site could fill the Albert Hall," he says. "Now the numbers are getting scary."

The business Mr Williams hatched in a London pub with two student friends has travelled a very different and more measured route from its main rival, Connecticut-based Kayak. While Skyscanner spent seven years building its model before seeking a first round of venture capital funding – £2.5m from Scottish Equity Partners (SEP) – market leader Kayak, which was founded three years later, has raised more than $220m, splashing the cash on acquiring competitors and paying Oscar-winning actor Kevin Spacey to narrate its ads on primetime television in the US. It is thought to be planning an initial public offering once the Facebook storm quells.

But don't mistake Skyscanner's more considered approach for shiftlessness. "We don't want to stop at beingthe most successful flight search engine in Edinburgh," says Mr Williams. His goal is to make the business Scotland's first billion-dollar web company.

Skyscanner is a vertical search engine – one that provides answers for one specific topic – storing all flight data on its own servers. Yet search results are delivered in less than a second.

"The model allows us to present data how we choose," he says, meaning the company can tailor results to individual consumers' requirements.

We might have been discussing online pub jukeboxes, another idea on the table that lager-fuelled evening when the three friends – all freelance programmers – cast their votes. But Bonamy Grimes and Barry Smith were won over by Mr Williams' passion for the Excel spreadsheet he had created to help find the cheapest fare to French ski resorts. The trio agreed that Messrs Smith and Grimes would continue their contract work but share their salaries so Mr Williams could develop the site full-time.

"I'd got tired of not putting my all into something," says Mr Williams of his time as a freelance IT contractor. "Budget airlines like easyJet, Ryanair, Go and Buzz were starting up, but there was no way of comparing prices or discovering new routes that had just opened."

Mr Williams programmed a tool that extracted data from the airlines' programs to collect the routes and prices for his spreadsheet.

They had little idea where to casino online find revenues, but Mr Williams recalls 14-hour days spent coding, convinced that if he found it useful, others would too. "We've always had faith that as long as we keep building stuff that would make our travelling easier, then we will grow our users. We didn't have friends or family investment, so we could really concentrate on user benefits, without investors' interests diverting us."

In fact, BMI, rather than a budget airline, became the first airline to agree to pay a referral fee followed by British Airways. "That was down to Barry's emerging skills of business development and his persistence in explaining how much cheaper it was to get a sale through Skyscanner," says Mr Williams.

Still, it took two years to reach £100 a day in revenue, and another two years to ring up £1,000 a day.

By 2005, all three founders were working on Skyscanner full-time.

Mr Williams had moved to Edinburgh with his Scottish wife, and persuaded the other two to join him. By 2007, they had 15 employees, but had neither the experience nor resources to extend the service beyond flights originating in the UK.

According to Mr Williams, it's easy to attract talent to a city as beautiful, and cosmopolitan as Edinburgh despite its relatively remote location. "The biggest challenge, is that we don't have a Twitter next door – a company that is showing truly world class growth and global presence. That means the ambition we have for our own growth has to be built from the inside out," he says.

The £2.5m cash injection from SEP enabled them to do both. Since then, website traffic and revenues have increased tenfold and the team has expanded to 150 people representing 30 nationalities. The site, which turns over £30m a year, is in 29 different languages and visitors outside the UK now account for more than 75 per cent of traffic.

The company, which turned its first profit in 2009, has opened a full-service office in Singapore, is about to open a smaller one in Beijing and plans another in the Americas next year. The funding enabled Skyscanner to hire senior executives with experience of running a fast-growing company, but also forced the three founders to decide on a chief executive. "None of us had titles, but one of us had to be CEO," says Mr Williams. "I wanted to be CTO but didn't want some idiot telling me what to do. So I became the idiot.

"The investment has brought more formality but we've learnt that we have to formalise certain things in order not to lose them."

Skyscanner launched an app last year, and mobile users now represents a third of traffic. The tech team, which accounts for half the workforce, is now developing voice-activated search functionality for the app.

Mr Williams is keen to push beyond flight search, giving users prices for rail, car hire, hotels, holiday packages, cruises, travel insurance and airport parking.

Meanwhile, Google has launched its own hotel and flight search tools and services and Microsoft's Bing Travel wants a slice of the pie as well. "We have to respect them all," admits Mr Williams, "but ultimately it comes down to our appetite as a company."

Skyscanner has not ruled out a stock market listing, but Mr Williams says he is happy to leave that decision to his board.

He does, however, still occasionally hanker for his pre-CEO days. "I miss coding, to be honest, but I do love the different challenges that arise as we get bigger."

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