Discover more from Startup Pirate by Alex Alexakis
The Community Powered Weather Network
Weather meets web3 with WeatherXM, how Skroutz uses product analytics, DAOs, ethical hacking, 9 funding rounds, 1318 jobs and more
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The Community Powered Weather Network
This week, we go down the weather and web3 rabbit hole with a team that has been building weather technologies since 2015. I’m really excited to have the two founders of WeatherXM, Manolis Nikiforakis (CEO) and Stratos Theodorou (Head of Engineering), on the newsletter to discuss why weather forecasting is broken, how weather data and blockchain technology intersect and why they’re creating a new weather data economy powered by smart contracts and tokens. WeatherXM is leveraging web3, IoT and machine learning technologies to bring about a new paradigm shift in weather data collection and positively impact the planet and the lives of millions of people on it.
Let’s get to it!
You’ve been building weather analytics products since 2015. You created your own weather station and had early traction helping large corporations monitor environmental conditions. And then in 2020, you decide to pivot. Can you share more about your journey and what led you to WeatherXM?
Back in 2015, we started building environmental IoT products, meaning smart sensors to facilitate better and healthier environments. We decided to follow the bootstrapped path (not raising VC money), but we had a hard time finding product market fit. Most of the products we built were used only once; nevertheless through these experiments we built engineering capacity (IoT products are a different beast) and got a deep understanding of the weather data industry and how this data is used in energy, transportation and agriculture.
We knew that in order to make a dent in the weather industry we had to create a global dense network of weather stations. Since this vision required affordable new weather sensing technology, in 2018 we joined HAX / SOSV, possibly the world's finest hardware accelerator, then went to Shenzhen in China and started working on our own weather station hardware.
While focusing on weather technologies, we were also paying attention to the emerging decentralisation wave powered by blockchains and distributed ledger technology, what people now call web3. We were particularly impressed by how tokens were introducing a whole new type of incentives in addressing the “chicken and egg” marketplace problem or how to kickstart a project that requires supply and demand from different entities. In our case, that would be sharing and consuming weather data. However, in the beginning, we remained quite sceptical to pursue this path for our business.
Fast forward to 2020, we were building weather sensing hardware that was used by large corporations to monitor environmental conditions. That was when we started exploring the possibility of integrating our technology with a blockchain. It started mostly as an R&D experiment/proof of concept in an attempt to be among the first to sell large quantities of our stations in the emerging markets of weather insurance.
Accessible and affordable crop insurance is crucial for smallholder farmers as a means to increase their resilience to the effects of climate change. Unfortunately, traditional insurance isn’t working for most farmers in developing countries. Available insurance covers are expensive, and there is little trust in traditional insurers due to cases of delayed or absent claims payouts, as well as a lack of transparency on the data used to determine claims. In recent years, insurance companies have tried to offer farmers more affordable weather index insurance services to protect them against climate-related risks for crops. These products are based on automated farm weather monitoring, so that payouts can be triggered automatically by low rainfall or lack of it thereof.
We spoke with all the companies that seemed active in the space, which helped us extract multiple insights on the status of this new weather market and felt more and more confident about the value and market need of our initial vision of dense weather networks.
The pivotal point was in August 2021 when we decided instead of taking the traditional Greek summer vacation, we would join yet another startup accelerator (yes, we have a long list of such participations). This time we joined Tachyon from Consensys Mesh, probably the world's finest web3 accelerator. Through collaboration with Consensys (one of the most prominent actors of the Ethereum blockchain), we realized that moonshots like our vision are indeed possible. That’s how WeatherXM was (re)born and today we are on a mission to build the world's largest weather infrastructure.
Why is there a need for a decentralised global weather network?
When it comes to weather data collection, today feels a bit like ARPANet, the 1970s precursor of the Internet: ARPANet was back then a relatively small network of very expensive systems, funded by the military and operated by governmental entities, research laboratories and universities.
Similarly, when it comes to who is funding and operating weather data collection, the science of modern weather forecasting that began in the mid-1800s by the British & French Navy has not changed much; it is still military and state entities. The way weather data is collected today is designed to serve these entities. We all take advantage of weather services in our everyday life, but collecting weather data to help the captain of an aircraft carrier or to support the design of agricultural policies for the next few years is totally different compared to helping a surfer, a small farmer, an amateur aviator or even a commercial airline or container carrier. In fact, the needs of everyday people, who care about an accurate weather forecast at a specific time and location, are often not covered by the existing weather data infrastructure.
At the same time, the scale, cost, and rate of deployment of weather data collection infrastructure are in line with what you would expect from these entities: large, expensive, slow, and aligned with their bureaucratic character.
Hence, we believe that our vision for a network of millions of small, inexpensive weather stations and accurate weather services that meet the needs of enterprises, small businesses and individuals worldwide requires a community-powered approach. And the emergence of smart contracts and tokens as means of coordinating and incentivising a community can make this vision not only a reality but also a sustainable and scalable project.
A community-powered weather network could provide the definite truth on weather conditions. Multiple industries would benefit from it, while also serving as a critical driver in the digital transformation of the insurance industry for agriculture, transportation, energy and tourism.
If you want to go deeper down the rabbit hole of blockchain, agriculture and parametric weather crop insurance, we wrote this article for Nasdaq.
So what is WeatherXM and how can someone provide weather data to the network or use such data? Also, tell us a bit more about the tech stack you’re using.
Today, WeatherXM is a very active community of 8,000 weather-crypto enthusiast members on our Discord server. Roughly half of them have purchased our weather station and are in the process of receiving and deploying it. We recently shipped a first batch of 1,000 weather stations, which are actively collecting weather data worldwide and we are currently expanding our manufacturing capability to meet demand.
As seen in the unboxing & instructions video of our meteorologist Stavros, it is quite simple to setup our 1st generation WiFi weather station. Our 2nd generation station, which is also compatible with the Helium / LoRaWAN network, will be even easier to deploy. Using our mobile app, the station owner configures their Ethereum compatible wallet (e.g. Metamask) and receives daily rewards in our WXM token, which is currently deployed on Polygon development network. We are also working on a data quality validation mechanism that will ensure we don't reward bad actors, e.g. station deployments that do not adhere to our placement specifications.
All weather data is collected in our IoT platform where we aggregate 3rd party forecasts, and build machine learning models to improve the forecast accuracy per station’s location. Therefore, station owners also benefit from our hyper-local weather forecast. Once we have data from a substantial number of weather stations, we will initiate sales of advanced weather services built on top, and this revenue will be transferred back to our token through a burn and mint mechanism, essentially removing WXM tokens from circulation.
In addition, weather data is stored directly to IPFS decentralised storage infrastructure and later on to Filecoin. This decentralised storage approach combined with device and location proofs, which we have built in our hardware, creates a very interesting web3 byproduct.
Our stations act as the world's first web3-native weather infrastructure for providing weather oracle services on the blockchain. Let me unpack this here for a second. Blockchain oracles are entities that connect blockchains to external systems, thereby enabling smart contracts to be executed based on inputs and outputs from the real world; weather conditions in our case.
Blockchain oracles are a critical component in the digital transformation of the insurance industry as blockchain-based insurance services for agriculture, transportation, energy and tourism. These depend on oracles to trigger payouts according to weather conditions. So WeatherXM provides the definite truth on weather conditions, enabling decentralised applications to make decisions in a trustless way.
What are the next steps and long-term vision for WeatherXM?
Our mission is to collect high quality, hyperlocal data for every corner of the world and make it universally accessible and useful.
We are currently focused on the first part, building the infrastructure that will allow us to collect this data. The next step will be to make it accessible and useful. We want to make the raw data collected by the WeatherXM network open to everyone. At the same time, we are working on building our own services on top of it. These services include hyper-local weather forecasting that will be free to our community, commercially available b2b advanced weather forecasting and web3-native weather oracles.
Although, in our hearts and minds, WeatherXM is a community project, we had to make some design decisions that required centralisation. However, as the project matures, more and more components and aspects will be open-sourced and decentralised, allowing our long-term dream to convert WeatherXM into a Decentralised Autonomous Organisation (DAO). A lot of what we are already doing, for instance, our tokenomics design and our selection of investors, is moving towards this direction.
Who else is behind WeatherXM?
Behind WeatherXM is a great team, a select group of investors and an enthusiastic community.
Our team has rapidly grown to 17 people in the last year, all based in Greece. We are very proud to be one of the first teams in Greece with core work on web3 and even more proud to be pushing the limits on embedded systems hardware and software, sensors, low-level communication protocols and of course weather. To accomplish all of this and more, we need to grow our team fast. So far we have 10 positions open and soon to be more!
We are also close to announcing our next funding round. Although we cannot disclose more on this, we are very excited about the investors that participated, since they share our values and our vision, and also have a significant track record in areas such as web3 and global markets.
Looking for your next opportunity? Check out job postings from Greek startups in Greece, abroad, and remotely.
Paperless trade solutions provider, essDocs was acquired by Intercontinental Exchange (ICE), an owner and operator of financial and commodity marketplaces and exchanges.
Series B financing of $40m for Ergeon to disrupt the construction industry starting with outdoor construction.
Miga Health has raised a $12m seed round to build a consumer product around heart health, backed by several funds and angel investors.
FoRx Therapeutics raised a €10m seed round by the investment arm of Merck, Novartis and Pfizer to develop a new generation of cancer drugs.
HR tech startup, Bryq, announced a pre-Series A of $4m with Big Pi Ventures participating in the funding round to eliminate hiring biases, time constraints, and inefficient decisions in talent management.
Urban drone delivery company Matternet raised a new funding round, with Phaistos Investment Fund participating as an investor.
finloup, the buy now, pay later startup with a focus in Southeast Europe starting from Greece, announced a new funding round by Genesis Ventures.
Lerna AI, a startup that helps you better understand your mobile users without invading their privacy, raised a new funding round by Genesis Ventures.
Athroa Innovations, which invests in and supports deep tech startups in early-stage, announced a €550k funding round with participation from Big Pi Ventures.
A medtech startup that enhances the healthcare experience for chronic care patients, ApoFox, was backed by Antler in its second Berlin cohort.
A plan in the making for Deutsche Telekom to create an engineering hub in Thessaloniki.
Interesting Reads & Podcasts
Had a great chat on Business Undercover podcast with Orestis and Pantelis. We covered the value of communities, why work on side projects, getting early feedback from customers and how Startup Pirate started.
How do you go from a hypothesis to building a product customers love with Mark Tsirekas, VP of Product at ZOE, here.
What things to get ahead of in a downturn as a CMO from Alex Poulos, Chief Revenue Officer at MadKudu, here.
Haris Pylarinos, CEO & co-founder of Hack The Box, on his journey creating a community of hackers, ethical hacking, cybersecurity and more, here.
A post by Dean Pappas, co-founder of Grape, on using simple, key metrics to measure how decentralised a DAO is.
Paul Stavropoulos, CEO & co-founder of Archie Finance, discussing identity in web3, here.
A podcast with Dimitris Karteris, Product Analytics Lead at Skroutz, on product analytics and how insights help Skroutz form their product strategy.
What is 3D printing from Lefteris Statharas, Senior Technical Writer at Dynacyte Biosciences, here.
“Azure App Service Networking Options” by Thessaloniki .NET Meetup on Jun 17
“Angular Rocks the Front End” by GDG Athens on Jun 22
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Thanks for reading and see you in two weeks,