The Edinburgh-based Northern Tech Awards winner is expanding its services and its reach, and now employs around 780 people in 10 offices across the UK, Europe, China, Singapore and the US.
As co-founder Bonamy Grimes explains, ambition to become a global company from the get-go has been a vital factor in Skyscanner’s success.
What’s your startup story?
There’s a drive to try and start up companies straight out of university, but we didn’t do that, and we went our separate ways for a while.
We had Project X, which was codename for what would be known as a fin-tech start up now.
We started working together to do some coding and actually create something. It never really went anywhere, but we had fun doing it when we were both in Australia.
We came back to the UK and went back to contracting. When IR35 came in, it was easier to work together. Barry (Smith) came in and we set up a software services company.
Barry and I were good at the infrastructure and Gareth was a very good coder. We had a moderate amount of success, but it was very difficult to scale.
We needed something outside that had value that was not ourselves. We had a board meeting, and we all went off and wrote down ideas of what we could do.
Gareth was doing a contract that was two weeks on and two weeks off and he was having hassle finding the right flight to visit his brother in France, so he wrote a spreadsheet to compare them. It seemed a really good idea.
We pooled all our resources – myself and Barry carried on contracting and putting all the money into the company, and Gareth did some coding. It meant we developed an efficient company from day one. The mistakes we made turned out to be cheaper than if we’d got a lot of investment on board.
We started in 2001/2 and it morphed into Skyscanner. We officially launched in 2003 and from then it was probably five years of bootstrapping before we got our first round of investment from Scottish Equity Partners, in 2008. That was £2.5 million. It helped to justify the valuation of the company and we didn’t need to give away a chunk of the company to get the early money through the doors.
Since then, we’ve had a secondary investment from Sequoia Capital, one of the largest investments in any company Sequoia has made to date. More recently, we welcomed five new partners in January this year, who invested £128 milllion. We’re still growing, and still hungry and very ambitious – we still act like a start-up in almost every way.
What challenges did you face starting out?
There are loads of challenges when you start up a company, some of which were unique to us.
We didn’t have any expertise in the travel industry, so getting people to take us seriously was quite difficult early on. That naivety was probably quite good; it meant we failed to be scared off.
We’ve been very ambitious from day one. If you’re starting out in a Silicon Valley-type environment, back then I think you were more likely to come across people with that shared level of ambition. Often when we got new people in in the very early days, we’d have to reset their scale of ambition and that was often quite a challenge. We wanted to be a global company and the world’s best travel search engine.
What are your main challenges now?
Recruitment is always a challenge, particularly engineering recruitment – we’re looking for the best tech talent to support our accelerated growth, and we’ve a large number of engineering roles currently open. We’re looking for engineers who are comfortable working in an agile, fast-moving environment. For us, that means we release up to 100 times a day and accelerating, where we view experimentation as an intuitive standard, and where we are constantly evaluating and adopting the latest technologies that help us serve our users.
Continuing being a startup at scale is also quite a challenge. A lot of people say ‘you’re not a startup anymore’, but actually, startup for us is about rate of growth and innovation in a company. We’ve seen seven consecutive years of double digital growth – few companies of our size can say this, and part of this is due to the fact we retain an entrepreneurial mind-set throughout the company.
What are the key drivers for growth in the travel industry?
There are a number. The obvious one is geographic growth. We see Asia as absolutely essential to our success. The Asia Pacific region continued to show strong growth in 2015 with visitors increasing 48 per cent last year. Mobile visitors grew 62 per cent year over year. This includes Japan, the third largest travel market in the world where Skyscanner and Yahoo! JAPAN established a new joint venture, Skyscanner Japan, in July.
People really need a global solution to finding flights, hotels, and car hire etc. We all know about airlines that fly around Europe pretty well, but someone sitting in, say China may not; likewise, someone in the UK that wants to fly in China needs to find that out. We couple comprehensive global coverage with local knowledge and partnerships, so we give travellers the best of both.
There’s a need for a classic search engine to provide that in a single place. We’ve been primarily focused on flights but then people also want to book hotels and car hire. We’ve diversified our offering in recognition of that, and have seen great uptake – revenue for our car hire product grew 71 per cent last year.
Key to our success is our powerful technology, which we’ve built from the ground up. It allows us to provide B2B services through Skyscanner for Business, powering the travel search for the likes of MSN, Lonely Planet and Groupon. In 2015, we saw revenue for this stream double. We’ve over 600 Skyscanner for Business partners.
Innovation is also a key driver, and we’re proud to have a few industry firsts to our name, including a recent partnership with Amazon Echo – the first for a global metasearch. We recently partnered with Amazon Echo to integrate the Skyscanner flights API into Amazon’s cloud-based voice service, Alexa. This integration allows users to ask Alexa to search Skyscanner for flight travel options. It’s fascinating to see how voice search will develop in the future.
Why did you choose to start in Edinburgh?
It wasn’t planned. We didn’t sit down and think, ‘where’s best place to start a company?’
We were living in London at time, then Gareth moved to Edinburgh to start a family and it happened to be here that we started employing people.
It was very fortunate. We’ve found Edinburgh a wonderful place to grow a company, there’s a superb university with exceptional computer science graduates. It’s a very cosmopolitan city with lots of people from all over Europe living in Edinburgh. The tech scene in Edinburgh has really grown over the past decade, and it’s a very supportive one.
What’s the digital tech scene like in Edinburgh then?
There’s a very good startup scene. As I’ve said, we’re all very supportive of each other, and there’s a lot of sharing of knowledge and experience that goes on.
There are also a number of incubators, including nearby Codebase, a tech startup accelerator scheme, which is absolutely fantastic and a number of companies from there are doing very well.
Do you collaborate with other digital companies locally?
We do; meet-ups are very important. We speak regularly at conferences, sponsor meet-ups for tech-minded people and companies, as well as host events.
We collaborate with a number of local companies. When we first made the move into mobile many years ago, we collaborated with local mobile developer Kotikan. Mobile as an area has expanded astronomically for us (mobile visits grew 60 per cent last year), so this is something we’ve expanded upon in-house since. However, Kotikan has relatively recently been acquired by another tech powerhouse, FanDuel, who are headquartered in the same building as us. It’s a good example of the way that at a local level it’s very important to have smaller companies, so everyone can feed off each other. It works very well.
You won the Overall Judges’ Award – what does that mean for the development of your business?
It’s always great to have recognition of what we’ve achieved. I hope we impressed the judges with our level of ambition. I don’t think we’d have got where we are without that and we still have the hunger to get even bigger.
Our staff work hard, and are very passionate about making Skyscanner the best it can be, so it’s always nice for that hard work to be externally recognised.
The Northern Tech Awards are good for us – we didn’t start up in London or Silicon Valley, and to be recognised as a company with global ambitions and a certain amount of success is great.
How important is it to get recognition from your peers as a Northern company?
I’ve touched on how important it is to emphasise that tech success doesn’t need to come out of London or Silicon Valley. Successful internet economy businesses can be based almost anywhere. Saying that, I’m usually at the end of a slow internet connection in Norfolk; my pet campaign is to get rural internet speeded up. There is a lot of talent sitting end of slow broadband!
What’s the next step for Skyscanner?
Key drivers for growth in the sector are our geographic reach and continued expansion, including in Asia and the Americas. We saw 48 per cent and 55 per cent visitor growth in those regions respectively in 2015.
It’s product-led in terms of more integrated travel services rather than just a flight search engine – we now provide hotel search, car hire search, as well as tailored localised offerings such as buses in India, or campervans and airport transfers in Europe.
In the UK, we’ve launched a beta product called Travel Pro, which looks to take the pain out of booking corporate travel, it’s incredibly simple, saves both time and money, and best of all, it’s free. Skyscanner has been using it internally for over a year, and external companies using it include the likes of TransferWise. We’re excited to see the future of this area for the business.
It used to be the case that people would browse for flights or hotels on their phone or tablet, maybe on their commute to work. They’d then book from a desktop in the evening or over their lunch break. Now, we’re seeing people are increasingly comfortable on not just searching but booking on mobile – mobile visitors now represent 59 per cent of total visitors, while bookings grew 24 per cent, comprising 42 per cent of all bookings. So I think we’ll see that trend continue.