Foldable boats – what will they think of next?

Foldable boats – what will they think of next?

October 4, 2013

Adam Courtenay

James_Graham_GM_having_a_fish_at_Rottnest_Island-article-620x349

This entrepreneur liked the idea so much he bought the company.

When Perth entrepreneur Deryck Graham first saw the original prototype for his Quickboat, he liked it so much he bought the company. It was not the first foldable boat ever made – but Graham saw the potential to make it work without the use of clips or latches, nuts and bolts. He planned to make it into the ultimate DIY-friendly boat, capable of being stored under a bed or in a garage, transported on roof racks and constructed in less than a minute.

In April last year, Graham, 52, bought the design and patents from Quickstep Holdings, the aerospace company he co-founded, and named the new venture Quickboats. He began on a global fund-raising venture, which has since netted him $1.5 million from around 30 high net worth investors.

It will begin retailing in December. There are around 50 advance orders and thousands of “strong inquiries” he is confident of converting into sales.

While the “minute-to-make” boat was a hit at the Sydney International Boat Show in August, it is not an original concept. Graham admits the boat’s inspiration was Porta-bote, another Australian company which has sold around 90,000 folding boats and which itself claims a four-minute assemblage time.

The big difference is Graham’s space-age design uses so-called “Armor Skin” panels secured by Kevlar hinges and no metal parts.

It will be interesting to see if his broad vision for the boat will work. He wants it to appeal to the weekend camper rather than pure boating enthusiasts: “We’re thinking lifestyle, not boat segment,” he says.

Nor does he believe that the retail price of $4375 (including GST) will put off his market. It’s not for the guy who wants a $100 tinny to fish locally. It’s for the go-anywhere, entrepreneurial outdoor traveller.

“I wouldn’t travel around Oz with a tinny, and blow-ups are not very good and get very wet. You can take a Quickboat to the Top End, stay for three months, fold it up and then go on to the next caravan spot. It’s for guys who want to fish in lakes and streams they couldn’t normally get to, or the family with two young sons who want to go fishing once or twice a year.”

Undoubtedly the boat is efficient, but the company’s structure appears unwieldy. It may be Australian-originated with the main industrial designers in Sydney, but there are other designers in Ireland and the boat’s engineer of composites is French. It’s manufactured in Thailand, uses virtual assistants in the Philippines and is about to engage a technology officer in Singapore. The company’s European agent is based in Amsterdam and the first salesman is likely to be hired from Adelaide.

What about his home town of Perth? Graham, who runs the company with general manger (and nephew) James Graham, says it’s too expensive to hire anyone from “the most expensive city in the southern hemisphere”. He says it all will be managed through “a new generation” of cloud technology.

Graham is no stranger to the virtual world – he sold about 20 boats in a promotional sale at the cut price of $3000 through crowd-sourcing platform Indiegogo, through which he also raised $65,000. It was a ploy to simultaneously raise money and the company’s online profile.

While his reps will be targeting the big boating and camping retail chains across the world – and particularly in the US – he intends to sell boats direct from the Quickboats website, with deliveries to a customer’s front door no matter where they are.

How many can the company produce? Graham says the Thai manufacturer has a capacity constraint at about 500 boats for the first year. He intends to launch in the US the year after to ensure he can manage the hoped-for demand.

“The first thing Americans ask is ‘what’s our margin?’ and the second is ‘what’s your inventory?’ We know, for example, that there is a middle-sized camping and boating network in the US with 185 stores. If it alone sold one boat every week per store, that’s 4500 sales per annum. We’re hunting for the big retail chains – as well as building a community online.”

By Graham’s own admission only good communication will prevent chinks appearing in a company which he acknowledges is “geographically all over the place”. He and his nephew own about 65 per cent of Quickboats although further fund-raising may dilute their stake. He expects the break-even point to occur at around 600 boat sales (without add-ons) with profitability at around 800.

“The first 12 months are all about contractors delivering designs and products and getting systems and processes right – then it becomes an item for sale, and it’s all about putting in distributorships,” Graham says.

“We have to adapt to all the evolutionary stages. Nothing is constant – this is still a start-up.”

About bambooinnovator
Kee Koon Boon (“KB”) is the co-founder and director of HERO Investment Management which provides specialized fund management and investment advisory services to the ARCHEA Asia HERO Innovators Fund (www.heroinnovator.com), the only Asian SMID-cap tech-focused fund in the industry. KB is an internationally featured investor rooted in the principles of value investing for over a decade as a fund manager and analyst in the Asian capital markets who started his career at a boutique hedge fund in Singapore where he was with the firm since 2002 and was also part of the core investment committee in significantly outperforming the index in the 10-year-plus-old flagship Asian fund. He was also the portfolio manager for Asia-Pacific equities at Korea’s largest mutual fund company. Prior to setting up the H.E.R.O. Innovators Fund, KB was the Chief Investment Officer & CEO of a Singapore Registered Fund Management Company (RFMC) where he is responsible for listed Asian equity investments. KB had taught accounting at the Singapore Management University (SMU) as a faculty member and also pioneered the 15-week course on Accounting Fraud in Asia as an official module at SMU. KB remains grateful and honored to be invited by Singapore’s financial regulator Monetary Authority of Singapore (MAS) to present to their top management team about implementing a world’s first fact-based forward-looking fraud detection framework to bring about benefits for the capital markets in Singapore and for the public and investment community. KB also served the community in sharing his insights in writing articles about value investing and corporate governance in the media that include Business Times, Straits Times, Jakarta Post, Manual of Ideas, Investopedia, TedXWallStreet. He had also presented in top investment, banking and finance conferences in America, Italy, Sydney, Cape Town, HK, China. He has trained CEOs, entrepreneurs, CFOs, management executives in business strategy & business model innovation in Singapore, HK and China.

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