Good business can be wherever you make it, especially if you have the entrepreneurial spirit, a good idea, and a great innovative approach.

There are fortunes to be made for those that can create disruptive start-ups which challenge existing businesses with new models business models, such as Uber and Air BnB or anyone who can unlock the benefits of big data and the digitization of business.

Never before have we been in an era where so much opportunity is available for people to create billion dollar business in just a few years rather than over several decades.  

But it's knowing where to look,  what to look for and then how to monetize it; that will separate the winners from the loser in this new digital economy.

David Friedman is one such entrepreneur. His business idea came when driving past a bicycle rental shop and noticing that on any day that it rained the shop was closed, as nobody wanted to rent and ride a bike in the rain.

So far this doesn't look like much of a business idea, but David started to wonder how many business had their revenue and profits dependent on how good the weather was.

$4 Trillion Dollar Market

As it turned out, based on their investigations, around 70 percent of business have finances that are impacted by the weather, that's almost $4 trillion of the US GDP.

This included business as diverse as farmers, bicycle rental stores to sporting event organizers, and construction all of who would take a financial hit every time it rained.

So to David, it was clear that he had identified a need, one where these businesses would pay for a service which would help to guarantee them income, even on bad weather days.

With a background in mathematical programming, it occurred to David that it should be possible with all of the weather 'big data' that was freely available, that we should be able to do a much better job of predicting the weather.  This saw David launch a company called Weatherbill in 2006, which sold insurance policies which covered loss of income due to weather.  

Using advanced mathematical modeling techniques, and the power of the Amazon Cloud computing services they were able to accurately estimate the probability of bad weather at a detailed. This allowed them to come up with the right pricing for each policy based on its specific location. 

They now had created a revenue-generating business based on betting on the weather.

Passion, Purpose and Increased Revenue

The goal of the company was not just about making money and in 2006 WeatherBill rebranded itself as the Climate Corporation with the mission "To help all the world's people and businesses manage and adapt to climate change".  With this change the company now dropped all other customer types and focused solely on farmers.

Using all of the historical data that they had available regarding the weather and crop yields they were now in a position to be able to make significant predictions, at a field level.  Such as, when would be the best time to plant crops, based on weather predictions and soil conditions, to maximize crop yields.

They were now moving from farming insurance to farming consulting and helping to optimize crop yields based on analyzing both the historical data and the real-time weather data which was freely available.

In 2013 Climate Corporation was bought by Monsanto for $930m, as Monsanto was looking to offer these types of services to their existing customers.

In just seven years, CEO David Friedman has created a billion business all of which started by watching the rain.

 

Over the next few years it will be interesting to see where the next billion dollar start-up comes from and what simple idea have they monetized through innovation, digitization and entrepreneurial thinking, to meet a business need.