It All Started With
Meteo-Logic's road from a weather prediction algorithm to a power futures trading system
"Everyday learning has been imperative for that transition. We adopted scrum methodology, and we retrospect daily, analyzing and learning how to improve, adapt and build for the market's current and future needs," says CEO and Founder Igal Zivoni
We have all come across the many news reports on tech entrepreneurs who have raised millions, turned their startups into unicorns or have gone public on the stock market. But like with every tale, these success stories also began in a small humble office with a dream that didn’t seem possible and included many hurdles and disappointments on the road to success. How did it all begin? What did the early days in a company that made it to the top look like? And what can entrepreneurs that are only getting started learn from those that have already made it? All of this and much more will be featured here in our new series “It all started with…”
Founder and CEO: Igal Zivoni
Sector: Energy Trading
Stage: Go-to-Market (launching Hedge Fund)
Capital Raised: $18M
Investors: Gilad Shabtai, Horizon Ventures, Nir and Arie Kalkstein, Israel Oil Company and Rega Ventures
Number of employees: 24
“When we started Meteo-Logic, I had to explain pretty much everything. Now, however, renewable energy markets are exploding. Everyone understands that the world strives to reach zero emissions, and in addition, electricity is the new “fuel” where demand is due to double by the end of the decade,” said Igal Zivoni, Founder and CEO of Meteo-Logic. “Back In 2011, the electricity market was controlled by governmental entities that manufactured, supplied, and distributed to end-users. Now, the reforms of recent years in developed countries have privatized the electricity market, and electricity prices are traded freely, by the rules of demand and supply, like any commodity.”
Where did the idea come from?
I walked near my house one day and bumped into my brother-in-law, Nir Kalkstein. He was getting ready to have a party in his garden and was worried that it might rain. He asked me whether I knew of an accurate weather forecast beyond the usual “scattered showers expected in the Sharon area” that gives no clue as to specific time, location, and volume of rain – he was frustrated!
Nir was then the founder and Chief Algorithms Officer of the algo trading company Final. While I was thinking about this question, he gave a surprising response to his question: "I think I have a solution that can answer these questions. Do you want to start a company around this technology?" I ran it around my head for a couple of days and said, “Yes!” and Meteo-Logic was born. We then deep-dived into developing an AI, Machine Learning-based generic forecasting system that processes every comparative weather parameter and produces a highly accurate data-based weather forecast. Nir could have his party with peace of mind.
We started Meteo-Logic in my garage (where else!). After a year of R&D, we focused on the renewable energy market, which was then in the slow process of transformation into big data, becoming the dominant source of power in Europe and other countries. Horizons Ventures (Li Ka-Shing’s Innovation fund) led the first financing round. Later, we developed and tested an innovative electricity prices trading system based on accurate weather forecasts and other massive data sources, such as grid load, production and trading data.
We are currently launching the first autonomous AI/ML Hedge Fund, focused and dedicated to the Power Markets, based on our unique system, with a prominent financial institution and several pioneer investors already joined up.
How did your family and close friends react?
After 17 years in ECI Telecom as an R&D leader, I was ready for the next step. My wife and family were shocked but very supportive of this big step. I wanted to establish a company with highly talented people that love what they do and probe cutting-edge technology and this new and fast-growing market opportunity. We succeeded in realizing this vision in Meteo-Logic.
How did your days and nights look like startup entrepreneurs?
I always believed that working hard doesn't contradict a healthy balance between work and home. From day one, I knew I didn't want a 24/7 company. We’ve gone a long way together now, and I feel it has proven to be the right approach.
Every entrepreneur experiences uncertainty when starting a new venture, no doubt! But our dream has been big enough to carry us through the many turbulent times of an early-stage start-up.
How many rejections did you receive?
Too many to remember! But isn’t this always the way with pioneers in a new space? We needed brave investors, and we found them.
Early on, we applied for a tender for renewable weather forecasts in Texas. We knew it was too big for us, and there was no chance to win it, but we applied anyway. We learned a lot from that process. Failures often teach you more than your successes.
What was the atmosphere like in those years?Intense. In 2011, global warming issues and awareness only started to loom in the collective consciousness. Green and sustainable energies were subsidized and stimulated by governments. Now we see alternative energy markets operating on an increasingly large scale. We have grown with the market, and now, we are very ready as it matures. It's always better to run faster and be prepared for your market to ripen. It is a very complex market that requires deep understanding and provides us with significant barriers to entry.
What did your daily routine look like?
We chose to locate our offices in a village and not in town. We have a big garden, so we order in and sit out for lunch. We are dressed casually, and if the weather allows, we work out in the back garden.
What did your office/home look like?
We are located in a small village near Hod Hasharon ("Ramot Hashavim") in an old house with a big grass garden. It has a "family atmosphere", some people cycle to work and take a shower or play football on the grass. I would like to think that we enjoy both worlds: a harmonic atmosphere with the right work-mindset.
Who was your competition, the nemesis?
We swim in a massive ocean with many different business models, so we have some “frenemies” but no real nemesis as yet. We compete against the markets and, therefore, against other manual traders and AI-based trading teams, most of which work for the production companies themselves. We have a fantastic feedback loop from our daily trading activities at the end of the trading day: the profit line seldom lies.
Who was your idol, role model?
Personally, I look to Al Gore and Bill Gates, who were pioneers in our field, and they are inspiring to many of us. Our core idea is to make the world greener, and our contribution is by offering liquidity and bringing stability to a noisy and highly volatile market. We believe we are on the side of the good guys.
How has your product evolved since then?
Meteo-logic is a learning corporation that has pivoted from a pure player weather prediction algorithm set to a fully autonomous Power Futures Trading System, it’s been quite a journey. Everyday learning has been imperative for that transition. We adopted scrum methodology, and we retrospect daily, analyzing and learning how to improve, adapt and build for the market's current and future needs. We adopted the Israeli air-force method of post-mortem analysis, and it helped us go deeper and cope better with the challenges the market brings daily.
Igal Zivoni's Do's and Don'ts tips:
1. In a start-up – each employee is a key employee – be sure that they feel that way, and listen and learn from them.
2. TOP (Tallent, Organization, and Passion) is a model where we check the fit of these three parameters for each individual in the organization and for their position. The best fit will drive intrinsic motivation as opposed to extrinsic motivation.
3. Keep the organization as flat as possible, avoid “silos,” and keep the information spinning.
1. Every company needs processes and procedures, and it is also important if and when we want to grow, we need to create them without becoming too formal and rigid.
2. Don’t succumb to full home working! You might be surprised and even think that I am "old school" but I believe that when it comes to a small lean and mean company, we all need to see the "whole picture", so limiting working from home is important. Here, we build a "routine" where some days are "hybrid" but we have at least two days that all of us are physically in the office.
3. Don’t worry, stay strong, stay focused and keep believing!