Andy Dahl,
MyTiWi.com:
651.324.2029
andy@mytiwi.com
www.mytiwi.com
Dave and Andy Dahl
strive to attract investors
to MyTiWi
by Beth Ewen
Dave Dahl has been forecasting the weather for St. Paul-based Hubbard Broadcasting for more than 30 years. Four years ago he decided to bring a personalized forecasting tool straight to customers via the Internet, and co-founded a company with his son, Andy Dahl, to sell the tool to media outlets around the country.
They ran smack into an industrywide slide in advertising revenue, as traditional TV and radio stations and newspapers cut salespeople and design staff. The Dahls realized midway through last year that the most valuable thing they had was not the weather information, but the space around it that could be sold to advertisers. They took all the ad functions in-house, for a second revenue source.
Armed with an investment from Stanley Hubbard himself, Andy Dahl says, plus a second unnamed investor, the younger Dahl is now charged with bringing the company to the level where he can attract capital, fill out a management team, create an application for mobile devices, and still hang on to the personal service that he says is responsible for customer retention. Like so many entrepreneurs, the Dahls will find out whether they can leave behind their bootstrap beginnings and grow into a substantial company.
Upsize: Describe your company as it stands today.
Andy Dahl: Four years ago Dad and I started Totally Interactive Weather Information, or TiWi. Dad had been doing the weather with Hubbard Broadcasting, at the time for 30 years, now for 34 years. He said, Andy, a lot of people are turning to the Internet for weather. Let’s create a product that’s interesting, informative, and maybe more importantly is a revenue generator, mostly for ourselves.
We created Mytiwi.com. Shortly after that we started fielding calls from stations, saying, can we take that technology and place it on our website? The light bulb went on and we thought, we could package this technology and lease it to media sites.
That started a new revenue stream, to sell a monthly subscription and the media sites would be paying for the use of those tools. They were responsible for the sale of the ad space. Right about May this past year, we had about 300 media properties as customers. We realized that we can manage, deliver, do everything that we can do in those ad spaces, across all those media properties, from one central location. So we became the ad manager for all that space.
Upsize: It sounds like you’ve made a big change from your original business plan.
Dahl: We have, we have! We have matured in business. We started in 2007 and it was a tough time at media outlets and it only got tougher. Sales staffs were being cut at the media outlets, as well as the creative designers at those sites. They were really eliminating their ability to sell the ad space.
We thought, we can do this, and if we have access to all those advertisers, I can plug those in and manage it all day long. We can provide the weather tools free of charge, so the media outlets can have that content. In two-thirds of the cases now, that’s the case, that they get the content for free. The original clients, those guys that are paying subscriptions, we are not plugging national ads into their space. That’s about a third of our business now.
Upsize: Will that subscription piece become less and less of your revenue, as you sell more and more of the online ads?
Dahl: Actually, as of late last year and all of this year, the subscription model is becoming more popular again, because advertisers, especially smaller local advertisers, have money to spend again. It’s less effort, less energy for the media sites to sell that space. So they think, if we’ll pay a couple of hundred a month for a subscription for the tools, it makes sense for us to sell our own ad revenue.
Upsize: You’ll continue to develop both types of business, then?
Dahl: They tell us in business to strengthen a variety of revenue streams. So those two are solid. We also provide weather data to ad delivery systems or ad management companies that are out there. They’re responsible for delivering and managing the ads. They’re creating really cool ads that are a takeoff of what we’re doing, and they’re paying us for that weather data.
Upsize: Did you change your business because of a “eureka” moment, or did the change evolve over time?
Dahl: It was a re-focus on the importance of the ad space, because weather content can be gathered from anywhere, from a million different places. But advertisers are still advertising on some of those traditional media outlets, and so the aha moment for us was to emphasize the importance of that ad space. And we use weather essentially as a vehicle to deliver an attractive, interactive ad. So the emphasis has changed. If it was a pie chart, that slice of pie would now be turned upside down.
Upsize: Did that drive a stake into your father’s heart, to say that weather was just a tool to deliver ads? He is, after all, Mr. Weather, Weather, Weather.
Dahl: That very well might be true. He through and through bleeds weather! I haven’t asked him that; he hasn’t said that was the case. He wants to run a successful business, that’s the main thing. For us it was an evolution. It was: this is what our customers are asking for and we can evolve in that direction.
Upsize: You mentioned you can get weather from everywhere; you were like everyone else for a while.
Dahl: That’s true, we were for a while. Our product is strong because of its usefulness. It’s in places where people are spending time. The world is mobile, but still the way you experience the Internet at work, or on your desktop at home, we’re really reaching out to those individuals. There are something like 2,000 weather apps at least, so if we were adding just another weather app, then we would just add to the white noise and we would lose focus on what has made us successful so far.
Upsize: How much annual revenue are you generating now?
Dahl: We started the business on more or less a shoestring budget. We bootstrapped this thing. It was the opposite of the way a lot of people start a business. Dad and I started with just the two of us, and now we’re in year four, and now we’re looking at investment. We want to Mr. Hubbard, and we asked if he’d be interested in investing. He did. This past week we took our second investor.
Now we’re looking to raise upwards of $500,000, and we have a good start. So how do we get those investors at $10,000 or $25,000? You’d think it would be easy, with Dave’s name, and that’s the kind of message that we’re spending a fair amount of time on right now, building up the business with investment capital. We need a salesperson. We need an accountant. We’re approaching the angel community first, the friends and family round.
Dad and I have grown this thing together with our own ideas and our own thoughts, and it’s really time to add those thoughts from others.
Upsize: What’s your revenue now?
Dahl: We’re over $100,000 annually. I don’t know the exact number. We took a loan, roughly half the cost of the startup was in a loan. Dad and I have been essentially funding the rest. It’s a struggle every day sometimes. And it’s the kind of struggle that people who go to the 9-to-5s can never understand.
Upsize: So what’s it like to work with your dad?
Dahl: Oh boy, that’s interesting! On a personal note, you always end the phone conversation with, Dad, I love you, where if it’s an employer it would be different. You have the kind of conversations with your dad that you can only have with family, and you’re not going to get fired for it. But that also brings an enormous amount of pressure because you don’t want to let your family down. You don’t want to let your dad down. The business can come and go, but at the end of the day you have to be with your family.
Upsize: How do you split up the duties? Are you the main operations person?
Dahl: I run it day-to-day at this point. The Hubbards have really ramped up Dad’s responsibilities. He’s doing the most on-air programs he’s ever done in his life right now. I think he’s enjoying it. He’s doing it. He’s just a trooper. He doesn’t have the kind of time he’d like to spend on this company. He and I converse on a daily basis, and he’s really left me with the responsibility of making most of the decisions.
Upsize: Do you enjoy that hands-on operating role?
Dahl: I do. I do. But we’ve gotten to the point that I still want to deliver that quality service, and we have more than 300 clients so it’s at the breaking point. It’s just the two of us, although Dad’s wife, Julie, helps with the accounting piece. My title is vice president. Dad’s is president.
Upsize: How important is it to the company that Dave Dahl is the co-founder? I imagine that would be important for attracting local investors?
Dahl: You hit the nail on the head. His recognition is important here locally, regionally, but not so much nationally.
Upsize: How similar to Digital Cyclone, created by local meteorologist Paul Douglas and sold for $45 million, is your venture? Or shouldn’t I bring up the name of such a rival?
Dahl: Laughs. I actually do appreciate what Paul is doing, and he’s a smart guy. But we did not model on what Paul is doing.
Upsize: Tell me more about what you did model on: what was going on that made you think this was a good idea, four years ago?
Dahl: Four years ago is really an eternity, because the evolution of technology is mind-boggling. Four years ago it was before this big mobile explosion. At the time my dad was hearing about folks turning to the Internet for weather, and being at KSTP he was hearing from the sales staff. They said they needed something effective to show the advertiser; they needed something to sell. Remember four years ago that was the buzzword: interactivity. He was looking into marrying the revenue-generating possibilities with weather, because weather is one of the top search terms online. You bring those two together and now you have something.
Upsize: So what happens to your service if everyone does go mobile?
Dahl: That’s part of why we’re looking for investment capital, so we could shift our development more toward mobile. The other use of the money would be to hire salespeople. Before it was about going out and selling to media properties the weather tools. That discussion has given way to finding advertisers nationally, and finding investors. I need to give the advertising sales piece to others.
Upsize: Let me ask you a few philosophical questions. What is one turning point for your company, when something happened and things began to go much better than before?
Dahl: My answer isn’t very philosophical. Because of the state of the economy and advertising revenue drying up as it has, and therefore because sales staffs have decreased in size, companies have let their creative designers go. That is the secret of our most recent success. I can take on the responsibility of finding the advertiser, creating the ad, managing the metrics. The willingness to do all of those things, that was the turning point for us, because essentially our clients weren’t doing that because they couldn’t.
Upsize: Is that your background?
Dahl: No, not really. Microbiology is. I did that out of college for a corporation and I was bored out of my mind. You spent time staring at a microscope, wearing white lab coats in a sterile environment, talking to people who didn’t like to talk at all.
Upsize: So you were a little miscast?
Dahl: I was! You have to kind of justify spending the money for college. Here I am 36 years old and I still don’t know what I’m going to do with myself.
Upsize: What about the flip side, when something went very wrong. What happened and how did you recover?
Dahl: Actually, we haven’t had any disasters. But you know, the biggest challenge we face is the way that we chose to start. We are conservative. We have a low risk tolerance, so we weren’t the types that were going to go out, pre-proof of concept, pre-product to sell, we weren’t going to go out and gather investors. That has been our biggest challenge. We had opportunities to grow in certain areas and certain directions, and we couldn’t do it because we didn’t have the resources to do it.
Of course, if we had gone and raised $3 million or $2 million, it may have been a whole other set of issues that may have been unbearable.
Upsize: What’s the biggest lesson you’ve learned so far, about running a business?
Dahl: The importance of relationships, absolutely. We have 100 percent customer retention, every customer we’ve ever had selling the tools, since day one. I believe that’s because of the relationships we’ve built from day one. They can go anywhere. Why would they stay with me? I think they do because we’re attentive to their needs; we’re flexible. We’re there when they call; we answer their e-mails.
Upsize: What’s one thing you wish “they” would have told you, about being an entrepreneur?
Dahl: I think they told me that it was going to be a challenge. But could they have explained better the highs and the lows, the reality of it? You constantly have to be on. You constantly have to be thinking. There’s never a down time. I know why everybody doesn’t do this, because it’s just not easy.
Upsize: You have a big change ahead of you, with trying to gain investors and take the company to the next level. What’s going to be your No. 1 focus in getting the company there?
Dahl: Building out the pieces that you might find in a traditional company. Focusing on finding the talent that can do the job more effectively, more efficiently, who are truly professionals. Right now you’re wearing all these different hats and you don’t feel you’re there.
