Talon has its grip in the right direction

By DANIEL RIORDAN

It is a long way from the family basement to the Nasdaq, but soft-spoken North Shore entrepreneur Peter Maire is well on his way, with a little help from United States President Bill Clinton.

One day soon 48-year-old Mr Maire will even finish paying off the mortgage on his house, used to finance the business he and a partner started 12 years ago.

Talon Technology, which makes chips used in GPS (global positioning systems) that are used by boaties and car drivers for navigation, now employs 130 staff and expects sales of $30 million this year, almost all of them to overseas markets.

Three years ago, sales were just $3.5 million.

In 1998, Talon built a factory it thought would be big enough to meet its needs well into the new century.

Earlier this year, the company outgrew it and moved across the road at Northcote to a new 3700 sq m complex.

That is impressive growth by any standards, but Mr Maire insists there is nothing special about Talon.

"We've just reached our critical mass and penetrated the markets we're in."

A listing on the tech-rich Nasdaq exchange is Talon's ultimate aim, although Mr Maire admits the prospect of the leap into the very public world of the US capital markets is a bit scary.

And Mr Clinton's part in Talon's future? On May 1, he surprised the world by announcing an end to the intentional degradation of GPS signals for civilian users, increasing the effectiveness of Talon's products.

While Talon's initial success was founded upon its range of Navman marine navigation finders, in recent years it has expanded into land-based applications, which made up about 10 per cent of Talon's business a year ago but today comprises half.

One of its biggest customers is US map company Rand McNally, which uses Talon's chips for car navigation systems, marketed under the Palm brand name.

A North Shore boy educated at Rosmini College and trained as an electronics technician, one of Mr Maire's first jobs was building those icons of Kiwi home entertainment, the Fountain three-in-one stereo.

The road to Talon began when he and a partner bought what was left of the old Marlin fishfinder business and started a marine electronics company called Suntek, exporting to Australia and importing product from Europe and Asia.

They sold that business in 1987, just before the sharemarket crash.

"It was a reasonable company but the technology was old."

From his time testing the markets in Taiwan and Singapore, Mr Maire figured there was no point manufacturing a product unless you did it in big volumes.

Enter Lionel Rogers, also with an electronics background, and the owner of a plastics factory. Talon was born, basing itself in Singapore for three years before coming back to New Zealand in 1992.

For a year it contracted Fisher & Paykel to do its manufacturing, turning down a takeover offer from that company.

Talon was unable to attract venture capital in the early days, but secured funding from one of its smaller customers, Nasdaq-listed Ultra Data Systems - "we figured they were less likely to wag the dog" - which took a 24.9 per cent stake.

Talon has now outgrown its partner and put a reverse takeover proposal to Ultra Data a few months ago, but it was turned down.

These days venture capitalists are queuing at Talon's door but Mr Maire and his fellow shareholders - Ultra Data, Mr Rogers, development engineer Barry Gillard and general manager Steve Newman - are in no rush to dilute their holdings.

Mr Maire acknowledges giving up equity in your company is never easy, but says that sometimes it is necessary to ensure your product makes it to market before a competitor's.

"A New York merchant banking friend keeps reminding me of poor old Bill Gates who has only 6 per cent of Microsoft left," says Mr Maire. A tiny stake worth a measly $60 billion.

Talon developed its first GPS product in 1993. It impressed Mr Maire and his partners a lot, but hit the market with all the impact of a damp squib.

"It was a stunning failure," laughs Mr Maire. "We lost a lot of money on it and continued to do so until 1998."

The company made all its mistakes in the US, Mr Maire says. "We chose the wrong customers, who were too weak and didn't have enough money."

Luckily, stronger companies eventually saw Talon's products and became customers, including Standard Communications, owned by Philips, which decided it did not want Talon's existing product but something similar.

Over the next three years, Talon designed about 30 products for Standard. But domination by one big customer in the US was hampering growth, so Mr Maire set up a parallel operation in Europe, now its biggest marine market.

"We got balance back in the business. It took us away from that horrible Kiwi problem of being loyal to one company."

Talon then took that brand name to the rest of the world.

Some of its biggest customers include Leica, QualComm and Compaq.

Mr Maire says the marine market Talon sells to is worth about $1 billion.

The car navigation market promises to be worth more than $100 billion within 10 years.

GPS use in the cellphone market also beckons.

Before all that, however, Mr Maire has a mortgage-free party to throw.