So, You Want to Start a Weather Company

The weather industry is a particularly good place to start a company.  The needs for new companies are diverse, both large and small across various weather products and services.  Examples include mobile apps, forecast data generation, forecasting services, forensic meteorology, sensors and instruments, consulting meteorology, and more. 

If you choose to begin the process, you’ll have good company.  Those of us in AMS who have done so can share many stories, ranging from bad to good.  In most cases, the overall experience is positive and rewarding.  But there are always challenges.  You’ll find many in AMS with relevant experience who are willing to help you.

When you start a company, you can’t leave it behind at the end of the day.  Customers may try to reach you, employees will turn to you at all hours, and your brain will remain engaged working through issues.   Yet the exhilaration of setting the course and keeping on it while successfully navigating the challenges makes it all worthwhile for many of us.

So, here are some thought for how to proceed and succeed.  What follows is not a roadmap, which would take a much longer article, but a short set of hopefully helpful insights from someone who has started and sold a company.

Purpose and scope.  Think early and often about the company’s purpose and scope.  You may choose to start a big company (eventually) with broad capability across the field.  That opens the door to a large success but brings the risk of failure from insufficient resources to match your ambition.  Including co-founders with startup experience is important and finding the right investors is critical.  Or you may choose a more focused purpose and scope.  This requires less resources and experience but carries the risk of failure if your singular market focus or execution fail to generate sales.  Whatever you choose, stick to the core purpose but rethink and adjust tactics regularly as you learn and as your market evolves.

Financial resources.  Work carefully to identify and establish the needed financial resources from the start.  For smaller companies, you may choose to “bootstrap”, meaning you use your own starting capital and generate additional capital from early sales.  For bigger companies, or when you choose to grow a smaller company, you may need outside capital in the form of loans, angel or seed investors, or venture capital.  A key issue throughout is how to not give up too much of the company ownership to investors while still accessing sufficient capital to achieve your goals.  Once you’ve found your investment, you’ll need to manage that capital carefully, allocating it wisely to grow the company while reserving enough to solve unexpected issues or slow sales.

What success requires.  There are many perspectives here, but a critical factor is commitment.  Very often, this means putting the company’s success ahead of your own.  A founder may need to go without pay for an extended period if cash gets low.  That’s better than having the company fail.

What makes a company valuable.  In the end, you’re starting a company because you want to create value.  That value can be financial, measured by how much you make when the company is sold.  But it can also be personal, assessed by less quantitative metrics such as making the world safer and your business more efficient.  It’s your choice.  You may seek to sell (“exit”) as soon as a strong financial gain is possible or run the company for your whole career and pass it on then.  Buyers can be other weather companies, large industry players (such as IBM’s purchase of The Weather Company and Dark Sky’s purchase by Apple), private equity, or even individuals.

Whatever sort of weather company you choose to start, here are nine key points to remember.

1. Dream, whether big or small.  Do existing things in new ways or innovate new things.
2. Craft your company’s culture and stay true to it.
3. Get good legal and accounting advice early.  Establish a clear (and ideally simple) capitalization table (this identifies who owns how much of the company’s stock).
4. Network, everywhere.
5. Build a sound business case and stay flexible as it evolves.
6. Manage cash like it’s the last thing you’ll have.  Once it’s gone, so is the company.
7. Constantly seek advice and mentoring.  Establish a strong board and welcome their guidance.
8. Work methodically toward an exit, whether sooner or later - and whatever you choose that to be.
9. Put customers first, work to understand their needs, and embrace their feedback