A rev ahead in Wayne's world
Publication: Australian Financial Review
Author: Ian Porter
Date: 18 Sep 1997
Automotive software specialist Wayne Besanko has developed a world-leading software business which delivers its products via the Internet without fear of losing his intellectual property rights.
Mr Besanko's Powerchip company is one of a few in the world that can modify the computer programs that govern the engines - and performance - of all new cars, and the company can barely keep up with demand.
"I've already been approached with a buyout offer, from someone in Taiwan, but I didn't want to sell," the 28-year-old Melbourne entrepreneur said.
"I think this engine chip business has got too much potential for me to get out now."
Being able to read and modify the programs used in the engine management systems of cars is a notable feat because the car makers and their electronics suppliers try hard to make the chips inscrutable.
Despite this, Powerchip has already built up a library of programs for 1,500 different cars made around the world, ranging from the humble Commodore to the most exotic BMWs and Porsches.
Powerchip has even "treated" a Ferrari 512 in Thailand.
Each program consists of a series of "maps" that determine how much fuel will be pumped to the engine in a wide range of situations.
A Powerchip program chip can lift output by about 10 per cent for a fuel-injected engine and by up to 25 per cent for a turbo-charged engine, and there is no shortage of drivers who are willing to pay from $300 to $1,300 to increase the power of their engines.
The overseas demand has been rising rapidly, mainly through word of mouth, and offshore sales are now 40 per cent of turnover.
Powerchip has had sales in faraway places including Iceland and Saudi Arabia as well as it South-East Asian target markets like Taiwan, Indoneasia and Singapore.
Initially, it sent rewritten chips to the agents by air mail but, apart from the delays involved in physical transport, Mr Besanko quickly found that not everyone in the world operated on the good faith principle.
"I found when dealing overseas you can't take people on face value. We now have a 26-page legal document which all dealers have to sign."
Powerchip now also supplies all its software in encrypted form and can deliver instantly over the Net.
Its agents overseas need to have chips on hand in order to service customers, but they have no programs on them and are mounted on encryption boards.
When a customers comes in, the agent - either in Australia or overseas - places one of these blanks into a chip "burner" and contacts Powerchip's home page on the Net. After using the right passwords, the agent then select the customer's car model from the database and the system transmits the appropriate chip program in encrypted form.
It instantly burned into the agent's blank chip and can be installed straight away.
As the Web site can operate automatically around the clock, agents in any part of the world can offer customers immediate service.
Outside Australia, Mr Besanko is concentrating on markets in South-East Asia, as well as South Africa, Russia, Iceland and Argentina.
He expects overall sales to double in 1998 and is excited by the prospect, not least because overheads are minimal and production costs low.
"I think that the company has the potential to become the Microsoft of automotive performance software," he said.
* Wayne Besanko's Powerchip software company, which modifies the programs that govern the engines and performance of all new cars, can barely keep up with local and overseas demand.
* Powerchip delivers it products via the Internet without fear of losing intellectual property rights.
* It can lift output by 10pc for a fuel-injected engine and up to 25pc for a turbo-charged engine.