Garage tales

Sussex's AutoLogic is rolling along after humble beginnings

By RICK BARRETT
of the Journal Sentinel staff

Last Updated: Aug. 19, 2001

Sussex - Bill Nicholson's business has always centered on garages. But it wasn't until he was thrown out of his own that he realized his company had grabbed part of the market for fixing sick cars.

Autologic Co. Photo/Tom Lynn Bill Nicholson, president of Autologic, holds a handheld computer device used in automobile emissions testing equipment. N53-W24880 S. Corporate Circle, Sussex. History: Founded in 1993 by engineers from Snap-On, SPX and the former emissions engineering group of Bear Automotive; Bill Nicholson, president and chief executive officer; Mark Werner, vice president; 10 employees including six engineers. Ownership: Privately held, with Nicholson and Werner as the principal owners. Products: Develops and manufactures automotive diagnostic equipment, especially vehicle emissions testing devices used in vehicle repair shops and emissions testing stations. Also develops and sells software that can be used to manage repair shops. Forecast: $5 million in sales in 2002. The target market is users of emissions testing equipment in the U.S. and overseas. The plan: Blend new technologies, such as hand-held computers, with highly specialized software and emissions testing equipment. Quotable We were able to take a lead in technology because our bigger competitors went a little slower and took care of the U.S. market first. We started in smaller countries and grew fast. - Bill Nicholson, owner

"We were a typical start-up company," Nicholson recalled. "We started out in my garage, but eventually my wife kicked us out. She was tired of the telephone calls at weird hours and of us working all hours of the night."

Today, AutoLogic Co. has comfortable digs in a Sussex office park and has built its business on selling equipment to automobile repair garages.

Founded in 1993 by engineers from Snap-On Inc., SPX Corp. and the former Bear Automotive Co., AutoLogic designs and manufactures vehicle emissions testing equipment.

The company's timing has been great, Nicholson said, as automobile repair shops clamor for diagnostic equipment amid a national toughening of vehicle emissions standards.

AutoLogic also has done well overseas, having developed emissions testing systems used in Europe, Latin America and the Far East.

"We were hoping that Beijing would get the Olympics because it could be a boost for emissions testing there," Nicholson said.

The seed for AutoLogic was planted when Nicholson's former employer, the Bear Automotive Corp. emissions engineering group in New Berlin, moved to Kalamazoo, Mich.

"There were about 70 people in our group and we did not want to move to Michigan," Nicholson said. "I took a job as vice president of engineering at another company that allowed me to start AutoLogic at home."

Having some of the former Bear Automotive engineers disperse across the country in other jobs proved valuable for Nicholson and AutoLogic.

"All of a sudden we had connections all over," he said. "We had worked together back in the days when automotive diagnostic equipment was housed in big, sheet metal boxes with huge amounts of wires sticking out of them."

To break out of the sheet-metal-box syndrome, Nicholson and the company's engineers concentrated on developing vehicle diagnostic software that could be used with hand-held Pocket PCs.

One of the company's products, for example, is a portable emissions analyzer that automatically detects and records emissions problems during vehicle test drives. The mechanic simply plugs in the unit, activates a Pocket PC screen, and drives.

That ease of use is important, Nicholson said.

"We went with Windows-based software at a time when our competitors were using older DOS-based applications," he said. "Our market research showed that people repairing cars wanted software that worked well and fast. To them, time was money."

For three years, Nicholson kept his day job at Taylor Dynamometer in New Berlin and moonlighted with AutoLogic. Then he signed a contract with a major automotive parts supplier that propelled AutoLogic to the next level of business.

In 1996, Nicholson left Taylor and devoted all of his attention to AutoLogic. By then, the company was selling its products in Canada, Central America and South America.

"Almost all of our business was outside of the United States," Nicholson said. "But we were able to take a lead in technology because our bigger competitors went a little slower and took care of the U.S. market first. We started in smaller countries and grew fast."

Nicholson said he and his partners did not take a profit from AutoLogic in its first few years and instead put all of the revenue back into the company.

"It was kind of unusual. We were a technology company based on cash flow," he said.

AutoLogic slowly added employees and began selling emissions testing systems in Europe and the United States. The company expects about $5 million in sales in its fiscal-year 2002.

"We have spent a lot of money in the past couple of years so it doesn't look like we are still a bunch of engineers working out of a garage," Nicholson said. "We have been pretty successful at it, but we still have a learning curve in sales and marketing."

Another side of AutoLogic's business is developing software that automobile mechanics can use to run their shops. The "Auto Manager" software tracks everything from parts inventories and purchase orders to work estimates and customer invoices.

The software records a complete history on every shop customer for fast retrieval of old information. Customer records can be accessed by customer name, vehicle license number or vehicle identification number.

AutoLogic also has developed a diagnostics systems in which repair shop customers can drive their vehicles onto a ramp where steering alignment and brakes are automatically tested. The result is a quick, one-page diagnostics report.

Computerized record keeping and quick diagnostics equipment is fast becoming the standard in automotive repair shops, said Rich White, vice president of marketing at the Automotive Aftermarket Industry Association in Bethesda, Md.

"There is a whole new level of technology coming along that helps technicians get the diagnosis right the first time, and to get repairs done faster," he said.

AutoLogic has been approached by non-automotive companies seeking diagnostic equipment for a wide range of applications from dish washers to feed mills.

"We are staying focused on automotive diagnostics equipment, but we will explore other markets, too," said Ruth Johnson, company sales manager.

Looking back, Nicholson said he has no regrets about quitting a comfortable corporate job and starting a company out of his garage.

"My parents ran their own business," he said. "I had a strong desire to produce something where I had more say over its development and where it was going. That level of control is hard to find in the corporate world."

Besides having control: "I am really turned on by technology that mixes cars and computers. It's a really cool thing," Nicholson said.