KEY POINTS:
Have you heard the one about the boat with three wheels? It's great at cornering shipping lanes but a bugger to park at the supermarket.
Sealegs - the NZX-listed company that makes amphibious boats with retractable wheels - has been the butt of broker jokes since a nightmare
back-door listing in 2002.
But after last month's news that $950 million investment firm Fisher Funds had taken a 6.9 per cent stake in the business, other investors are now taking the company more seriously.
Other notable shareholders include Sir Selwyn and David Cushing, and professional investor Peter Masfen.
Sealegs chief executive David McKee Wright prefers to see Fisher Funds' investment as a milestone, rather than a vindication.
"What Fisher Funds for me in my mind did was mark the end of our startup - now institutions are getting involved because we've got some track record, proven the product, proven the business and we've got it all in front of us now," he says.
Sealegs joined the stock market in 2002, moving into the shell of tech company IT Capital.
The reverse listing and restructure was not well received - the original business plan failed and the share price slumped as low as 2c, compared with a closing price yesterday of 71c.
McKee Wright is apprehensive about discussing what he describes as a nightmare start.
"I think it's a little bit of who screams the loudest," he says. "Sealegs took over a failed tech stock so you had 5000 unhappy shareholders."
But some of the original shareholders are still there and a great deal happier, he says.
"As soon as you've got people in the money, they become very supportive."
Sealegs now has about 2500 shareholders, has passed the $4 million order mark and could turn a profit this year - depending which way a current management debate is settled.
"If we force the company to break even right now, it's going to come at the cost of innovation ... conversely, if we break even it's a good statement to shareholders," McKee Wright says.
"We've spent only $4 million on this idea so, in my mind, to spend another couple of million dollars to deliver a $100 million company is well invested money."
Sealegs sells rigid inflatable and aluminium boats which have steerable, retractable wheels enabling them to be driven in and out of the water, without the need for a four-wheel-drive car or tractor to back trailers down to the water's edge.
The company is aiming for half a per cent of the world's 5-12 metre boat market, which would equate to more than 1000 boats a year.
Two projects now being developed are a fibreglass boat which could significantly cut the cost of the hull compared with an aluminium boat, and a jet-powered craft which uses a single power unit to drive the boat on land and in the water.
Sealegs has global aspirations, although the original business plan for the reverse listing was to create a hands-on listed venture capital entity that would establish several companies - it had Virtual Spectator, Deep Video Imaging, Datasquirt, Conceptual Solutionz and Sealegs - before making an exit.
It didn't work.
"The market really didn't respond to that idea at all and we had to refocus ... had a look at the companies we had and said, 'Which one's got the most upside?"'
Sealegs was the quirkiest idea and McKee Wright no longer has an exit plan.
"We're just going to grow this thing as big as we can get."
The first two years may have been difficult but he had no doubts that the company would succeed.
"We just put our heads down, bums up and worked," he says. "Make success be your best revenge."
His faith in the product comes from a belief it solves a real problem of getting safely on and off boats and getting them easily in and out of the water.
"Once you start using them I couldn't go back to trailer boating," he says. "You couldn't pay me enough money to go back to all that hassle."
The boat can travel at 10km/h, enter the water direct from the beach and with its wheels retracted can perform like any other boat.
Sealegs technology is patented around the world and the company does not know of any direct competition.
McKee Wright says he does not understand the purpose of Alan Gibbs' Aquada car - another Kiwi amphibious creation.
"It's a bad car and bad boat," he says. "When you go on it as a boat you get absolutely drenched, you can't come out of it on the sand, you've got to have a nice low gradient.
"I struggle with what problem it solves."
The ultimate aim is to license Sealegs' retractable wheel technology to other boat builders, enabling increased demand to drop the cost to customers to perhaps as little as $5000 or $10,000.
But to attract the attention of major boat manufacturers and convince them to adjust their designs to accommodate the technology, the company needs exposure and sales.
Sealegs has sold 175 boats - 12 at this year's Auckland boat show - and has a three or four-month production backlog for about 50 boats.
It also has global aspirations, and McKee Wright returned last week from Rome where he delivered six boats to the Italian fire service - the company's first sale to an emergency service.
"If seconds save lives, Sealegs is the fastest way to get into the water," he says.
The company has also sold boats in Australia, the Middle East, Britain and France.
The company's technology could have saved lives after Hurricane Katrina in 2005, he says.
"Where they grounded the boats we just drive over and then float again."
Manufacturing was being outsourced until about three weeks ago but the Albany-based firm has moved into a new factory with capacity to house about 20 boats in production.
The company has 20 employees, "on its way to 40 or 50".
Barriers to entry for Sealegs include awareness and a pricetag which is about $20,000 more than for a similar rigid inflatable boat without wheels.
"That's too much so the only way to get that down is by bringing our manufacturing in-house."
But long-term, McKee Wright sees New Zealand as the company's base for innovation and design with major manufacturing work done overseas.
"We can't export from down the bottom of the world and pay $5000 a container to get it out of here," he says.
Competition from countries set up for mass production, such as India and China, means New Zealand should focus on developing intellectual property, design and innovation, he says.
McKee Wright was born in Auckland but grew up in Singapore, where his father was stationed with the Army.
An overseas upbringing and a Malaysian mother helped him to understand cultural differences, which he has put to good use when dealing with customers in other countries.
A flexible attitude is important for dealing with business cultures and practices which can change radically between countries, he says.
Dubai moves at "lightspeed" and business is often done on a handshake without paperwork, while Kuwait prefers a much more cultural sale that involves sitting, talking and gaining respect, he says.
"I deliberately talk quickly when I'm talking to Westerners because we talk really quickly and get to the point ... Asians I slow down 50 per cent and massage the point in."
And when he needs to relax, McKee Wright still heads to sea.
"When you're on the water all you can see is big things ... the big sky, the big islands, the big nature," he says.
"When you're on the land you see the little cars, the little lamps, the little houses.
"The ocean's my medicine."
David Mckee Wright
Sealegs chief executive
Home: Auckland
Age: 37
Education: Woodlands International School, Sacred Heart College, Singapore
Career:
1987-1991 - Financial analyst Rohm and Haas
1991-1996 - Managing director PC Direct
1996-1998 - Managing director Gateway
1998-2000 - Founder of Exo-net
2002 - Sealegs lists on NZX
