Alistair Crawford: How I found a million in the phone book

When a socialist government won the Maltese elections in 1996, Alistair Crawford decided it was time to leave.He had moved to the island five years earlier to develop a way for computers to scan phone books and create digital versions of them. The change of government meant less support for his project. In any case, "I had been in Malta for a long time and I wanted to come back to Britain".

He also had a new business plan. He planned to use the then-new technology of CD-ROMs to make print directories redundant. His ambition didn't stop at phone books he also wanted to digitise the electoral register.

With "tens of thousands of pounds" in the bank, he set up his new firm, iCD Publishing, in London. His first task was to get all the relevant data on to his product the UK-Info Disk. Then in 1997 he began selling it. "I didn't have much money for heavy advertising but we got a lot of media coverage" because his CDs were "disrupting the market".

Subscribe to MoneyWeek

Subscribe to MoneyWeek today and get your first six magazine issues absolutely FREE

Get 6 issues free

Sign up to Money Morning

Don't miss the latest investment and personal finances news, market analysis, plus money-saving tips with our free twice-daily newsletter

Don't miss the latest investment and personal finances news, market analysis, plus money-saving tips with our free twice-daily newsletter

Sign up

Until then the only way to get similar, complete nationwide information was to pay thousands to BT or to a credit-referencing company. Crawford was offering all the same data for just £19.95.

By 1999, iCD publishing was selling more than £0.5m-worth of CDs a year. But a new threat was emerging the internet. His CD-ROMs, once the height of modernity, were set to be rendered obsolete. But Crawford had seen the change coming; in 1997, he had registered the website name 192.com'. The number was the landline for telephone directory enquiries. "I was the first one to claim the name, so I got it for just $26." In the beginning he just used the site to sell his CDs, but as the money started to flow he began building an online database.

At first it didn't take off. "People were using dialup modems and their internet connections were slow, so it didn't really make sense to go to a computer to find a number." But by 2001 that had started to change. Soon more people were using the website to find information than were buying CDs. "We were eating up our own business but I knew it had to happen."

Crawford's response was to create a "pretty unique" business model to help the online business make up for the lost CD sales. "We gave directory services information for free but offered additional premium records, such as electoral role information, that people could pay to see." Anyone who wanted to see the extra information paid a monthly subscription fee.

Then in 2003 the market for directory services was deregulated and a host of rivals suddenly came online alongside established print players who wanted to build a presence on the internet. Yet despite this unwelcome development, 192.com thrived.

"Other sites tried to make money from advertising, or were focused on other parts of the business. Because we just concentrated on what we do best, we could give our customers a better service." Last year sales reached £5.5m and now the site co-ordinates almost half a million searches per day.

Crawford, now 43, expects mobile internet to deliver the next wave of growth for his firm. So he is busy investing in the software needed to attract 192.com smartphone users.