Member Article

Powerboat P1 "splashes" into emerging markets

Formed ten years ago, Powerboat P1 has transformed its section of the motorboat racing industry from an elite and exclusive sport, accessible only to the super rich, to a much more consumer friendly model that allows the masses to participate.

They also have big plans to export their franchise model to key emerging markets across the globe in the next two years.

James Durbin, chief executive and commercial director of the company explained how Powerboat P1 opened up their revenue streams, and brought costs to the consumer down from $0.5bn a year to just £5,000 in the UK.

“Three years ago the business shifted. It used to be about ‘How much money can I invest in my boat to make it go faster.’ It was more of a sport for the few because boats were so expensive, and people didn’t engage with it because it wasn’t person-against-person. It was more, wallet-against-wallet, if you like.

“So we changed the business. We wanted to increase stakeholder participation at every level and take complete commercial control of our business from production, right through to podium. We changed the business from a top-down model to a bottom-up model.

“Our goal is to find the best racers in the world, so we went through a design process and now manufacture our own boats. This brings commercial control to us and decreases the cost of the boats, which means a lot more people can get involved.”

To take motorboat racing to a truly global level and create a world championship, Powerboat P1 now has designs to sell its franchise to different countries, who will then take on the model and create a spectator base in different nations.

James explained how the franchise model works, and why it is preferable to the previous model.

“Revenues have increased because we sell franchises for national championships. Now that we’re building the boats we package them up with racing equipment and we sell that to an entrepreneur in a different country or someone who’s already in motorsports to take charge of it in that location.

“The other reason for the franchise model as well is that nobody can exploit the event or the sport, or improve the sport better than the local people. We’ve got that business mentality that if local people can run your business better, give them that opportunity. We’re sat in London at our headquarters and we sell off the franchises knowing that the events and the sport will develop better in the hands of local people.”

Powerboat P1 already operates races in the UK, the U.S. and the United Arab Emirates. By the end of 2013 the firm will have races in China and India, and they are currently in talks with Hong Kong, Scandinavia, Malaysia, Russia and Brazil for 2014.

James explained how, and why, they are targeting these countries.

“It’s really the emerging economies that we’re targeting and we’re getting a huge amount of interest because it’s a commercially viable business, it’s interesting and it’s a marketplace that’s wide open. And particularly attractive to a country with a nice coastline.

“We’re seeing significant interest from BRIC countries (Brazil, Russia, India and China). We’ve pushed this deliberately because we see those countries as the ones we need to be in to capitalise on strong and steady growth, so we’re viewed as a truly credible world championship.

“I think we’ve been able to look at these countries because our offering is so compelling. There’s certainly more corporate spend in these countries from a sponsorship perspective, and a greater willingness from the government and tourism bodies to spend on events like this to promote themselves in a growing economy.”

Powerboat P1 has invested $50m over the past decade and sold more than $3m worth of boats in 2012. It anticipates an $8m turnover for 2013.

This was posted in Bdaily's Members' News section by Miranda Dobson .