Hello everyone, and welcome to Risk Playbook. I'm Mike Mitchell, Vice Chairman of Graham Company, and today I'm joined by the founder and CEO of AccuWeather, Dr. Joel Myers.

Joel is considered the nation's most respected authority on the business of meteorology, and has been called the most accurate man in weather by the New York Times. After becoming enamored by weather as a child, he attended Penn State University for his bachelor's, master's and doctoral degrees in meteorology. He also served as a faculty member for the University for 18 years – and by the time he stopped teaching, he estimates he had trained approximately 17% of the country's weather forecasters at that time.

Joel always knew he wanted to be an entrepreneur and founded AccuWeather in 1962 when he was a graduate student. Since then, he's grown the business into the most accurate and fastest-growing weather media company. Joel, we're so happy to have you as our first guest on Risk Playbook.

My pleasure to be here.

Thank you. Let's get right into it. I know that AccuWeather has been a lifelong dream. And I mean, literally, lifelong. You developed a fascination for weather when you were a young boy. Tell us about that.

Well, when I was three years old, I fell in love with snow. I was enamored with snowstorms, and by the time I was seven, I was keeping a daily weather record of the conditions in Philadelphia. Growing up, my grandmother had bought me a diary, and I wrote the weather conditions each day. And about that time or soon after, I knew I wanted to be a weather forecaster.

When I was 11, my father showed me an article about a meteorologist in Boston, who was providing forecasts to fuel oil dealers, and since I was entrepreneurial, I already had—I got a paper route when I was 11. I was supposed to be 12—I fibbed about my age—and other little businesses on the side. I'm making a dollar here, a couple dollars there. And I said, “Boy, this would be perfect to combine my burning desire to be a weather forecaster with my entrepreneurial spirit and create a weather company.”

It evolved from there, but I remember a snowstorm in Philadelphia, November 6th and 7th, 1953. I was 14, well not quite 14—I guess I was attending Central High School. The forecast that morning was for cloudy, a high of 50, and a chance of a shower. So I rode my bike to school. It started snowing around noon, and by two o'clock, it was heavy snow, and I had to push my bike home through a driving snowstorm. We wound up with eleven inches of snow. Temperature was far from 50—it was 33 degrees. So I said to myself, “Boy, I can do better than this.”

And from that point on, that was my goal. And I used to get up early in the morning, probably starting around 11 or 12. And before the sunrise in the winter, you can get stations from far away and I had this schedule. I’d listen to all these radio stations across the country and listen to the weather reports. And I don't know if you saw Queen’s Gambit, but sort of like that. There was no weather map available, there was no internet. But by listening to these radio stations I pieced together in my head, the weather map, so I was able to predict and then challenge the National Weather Service which is the US Weather Bureau, on their forecast.

And I would call them up every day on the payphone from Central High and asked them what the forecast was for the third day, because the forecast was only today, tonight and tomorrow. And I said, “Isn't there a chance of snow or something on the third day?” So they took my call, they talked to me and it was educational, and so that's how I got started.

Well, it's a fascinating story, and it's almost hard to comprehend. So I'll say you are a pioneer, because you started the business in 1962—other businesses that were independent didn't exist. The weather forecast was free. I mean, what made you think that you could take and make that into a business and how did you get started?

Well, I knew what I wanted to do. A head of the department of Meteorology—I guess he wasn't head yet—Charlie Hauser, who was great, Dr. Hauser was a great mentor to me—a very creative guy, innovation, he was my PhD thesis advisor later on. But he knew of my dream and in 1962, I guess it was late November, he got a call from the local natural gas company, which is now part—then became part of a bigger conglomerate, but they served State College. And they needed forecasts. So he said—on the back of a ripped envelope, I remember—“Call this guy, he needs weather forecasts, and he may even pay you for them.”

So I called the gas company, gave them a high/low temperature five days out—that wasn't available from anybody at that time—and I charged $50 a month. They paid for the three winter months. So AccuWeather had $150 in annual revenue and we were off and running.

And how did you build your client base from there?

Well, I called other utility companies. Of course, it was just me—a 22-year-old graduate student, and of course, and then I called ski areas. I figured out how to help ski areas with artificial snowmaking. They didn't understand the artificial snowmaking process completely, so I helped them understand it, I helped them with forecasts. But even then, they were very skeptical. “Why should I pay you? You know, there's a government agency, I get forecasts for free.” So I had to try and explain “Well, mine are more accurate. They're targeted to your exact mountain, your exact location. They go further ahead. They give you relative humidity, which is an important component to know about artificial snowmaking.” But still, it was an uphill battle. But I was determined.

So over the next, I would say, ten, eleven years I called 25,000 prospects till I reached a hundred paying customers—which means I had 24,900 rejections. And when I said I wanted to start this business, even my parents, back as a teen, said I was nuts. They thought, “This is a crazy idea.” But my mother always said, “‘One track mind Joel’—so don't stop him. If he sets his mind to it, he'll figure out a way to do it.” And so I heard that growing up, and I did.

Well, it's obvious by your stories and your voice, you had a passion for it, and obviously a tremendous amount of determination to stick to it. That's the story of many successful entrepreneurs who are willing to take the risk and go ahead.

So fast forward, here we are. AccuWeather—a relatively household name. I think back to ABC News and I know they've been a customer for 49 years. But what I don't think the audience really understands is the impact you make and the clientele that you have that includes many, many, many Fortune 500 companies. Tell us what you do for them.

Sure. Well, just an overview of AccuWeather as a whole. Of course, we've grown 55 out of 58 years, and we serve 800 newspapers, 700 radio stations, a couple hundred television stations. But we also serve, as you alluded to, government agencies, cities and counties, but also businesses: thousands of businesses and more than half of the Fortune 500 companies: whether it's Federal Express, Amazon, UPS, railroads, insurance companies, you name it. On down to medium-sized companies. And we help them operate more efficiently. We not only give them forecasts that are more accurate—more tailored to their needs, that extend further ahead, contain greater detail—but are tailored to just what their needs are, and how we can reduce losses, whether it's in the supply chain, or keeping their people safe, keeping their equipment safe, or increasing efficiency, operating more efficiently.

But importantly, reducing risk and liability, which is very important. There are trillions of dollars in damage from weather and climate impacts across the world each year—trillions. And we help reduce that, minimize that and we save tens of thousands of lives, prevented injury to over a hundred thousand people, just by the AccuWeather forecast.

And of course, save companies tens of billions of dollars, and that's what they pay us for. These companies pay us significant money—only a fraction of the value, we bring to them—only a tiny fraction of the value. And it keeps their people safe. And we have so many examples of where we've saved lives and help companies make the right decision. And it's very gratifying.

Well, I'm sure when you save lives, that's your best payback. But, when I think of your value proposition—you help these companies assess risk avoid it by predicting the weather and giving them the right warnings—they can obviously enhance their bottom line.

And when I think today, we all know about Hurricane Agnes and Katrina and Sandy and all those big name weather disasters, but it seems to me that some of the weather frequency and intense natural disasters have increased most recently. I think of even just most recently, this year, the cold snaps in Texas left people without power, heat and water; I think of the wildfires out west, and obviously, hurricanes, they just, they seem to keep coming. What are you seeing—is it really an increase more so today? Or is it just that there's more coverage?

There's not a huge increase. Let's talk about hurricanes. Last year was a very, very active hurricane season, but some of the storms that were named last year wouldn't have been named or even seen fifty years ago. We didn't have a satellite coverage, for one thing. The criteria is a little different. And of course, there's a lot of coverage and there's more sensitivity, and our society it's “just in time” and so many things. So it's much more sensitive to any weather disruption.

Clearly of a cold wave that hit Dallas and Texas was extraordinary, but not unprecedented. Some records fell but some records did not fall. But the weather certainly is volatile and runs in patterns of volatility, and that's what our business is based on—whether keeping companies—we told our clients in Dallas eight days in advance of what was going to happen. It was almost to the point. They were prepared; people that didn't use us were not, and a lot of people suffered, unfortunately. And we're proud of the forecast we provided.

You talk about Tropical Storm Agnes in 1972, that goes back a long way—that was one of the first on the radio, and it's just a month before we started on Channel Six in Philadelphia. That was our first example of publicly saving lives and warning the public. Three days before the government issued any kind of flood warnings, we warned to the possibility of floods in the Poconos, and so on. And that was the first time that we really got some notoriety about doing that.

You mentioned Hurricane Sandy—we predicted that eight days in advance, it would take that unusual path, and would have the impact it would. And one of our clients made tens of millions of dollars on that, because they were able to go out and buy up batteries and have them in the store, when their competitors didn't. And water supplies—Hurricane Harvey—same thing. They had eleven stores in the Houston market, and we said these six are going to be flooded; these five stores, get the merchandise out of those (six), to save it. But these five will be okay, so promote the fact they'll be open and bring in water, and generators, and things that you'll sell.  And so it serves the community better, it serves their reputation better, it helps them monetarily. So that's what we do with companies. Every one of these cases, we can help these businesses.

In so many instances where it's just a question of getting people out of harm's way. I mean, with tornadoes, tornado warnings, we give an average of twenty minutes’ notice to our customers. And they’re more pinpoint, warning when a tornado is going to be within three miles or five miles of a plant, based on our patented radar reading situation. And the government has about eight minutes’ notice—so twenty, to eight minutes. And we have a much lower false alarm rate.

So the result is that better decisions are made, and we have so many examples of where there was no warning, we issued a warning, people sheltered, the facility was destroyed, nobody injured. Really that is what the gratification is for me, and many other people at AccuWeather, when we can make that kind of a difference. And people are actually alive because of what we did. You can't ask for a higher calling.

Wow, it's twenty minutes to eight minutes. That's a significant difference—doesn't sound like a long time. But it's just a significant difference and obviously the difference—

And that's the average.

Right! And the difference between life and death, right? And false alarm ratings—explain that to me. What do you mean by that?

Well, our false alarm rate is 11%. The government's is in the 70s. In so many cases too, we’ll tell companies there's a warning out, and we'll say give them what we call a “null warning,” meaning that there's no threat to your particular plant or facility. Maybe the county is under such a warning, or a section of a state, but the threat has passed, or is not going to be really for that particular location. So that kind of specificity really can sometimes mean a savings of a lot of dollars.

Seventy-something percent false alarm rate, that's incredible. And you're at eleven. Good for you.

Well, tornadoes are major threats. And it's one of the advantages of a commercial business that is the whole mantra is superior accuracy. And with dedicated people that are incredible, and work as a team, and are entrepreneurial, but dedicated, motivated to serve our customers better than anybody else can—is what I'm proud of.

I want to get to that. But before I do, let me just talk about the insurance industry for a moment. They are very adversely affected by some of these weather disasters, and I know that you actually work with some insurance companies—they're your customers. And I'm assuming you can help them identify what they want to stay away from, where they need to charge more money for premium? I know our listeners may not like to hear that, but we are in a tough insurance market right now. A part of it is related to some of these weather disasters and the high costs associated with them.

We do provide them with forecasts so they can make decisions whether it's bringing—knowing they're going to have to move people around to serve customers in a certain area, to be prepared for a hurricane or a disaster. In some cases, they will make the decision—we don't do that, we provide the data—but they may say “Hey, a hurricane may threaten this coastline. We're going to halt writing any policies because of the threat for the next week or ten days.”

So there are different decisions that these companies will make. Some of them may want us to do studies. “What's the risk of a major hurricane causing X amount of dollars on the east coast. And also a high windstorm in the UK, that same season, that will cause X amount of dollars.” Because sometimes, reinsurance companies will lay off risk—if it hits one, but not the other, or vice versa—they'll be okay. But if they get hit with two or three events in the same year, that could be a problem. So there are a myriad number of services that we provide.

And in some cases, an insurance company may give a discount to, say, auto dealers, that use our service for hail so that they get their cars off the roof if a hailstorm is coming, because a hailstorm and all the cars are out on the lot, they can all be damaged. New cars, you can't sell any of them as new.

That’s a really interesting point. Maybe in my business, we should start to think about advising our customers to utilize your service as a loss control technique to help them avoid claims and maybe save some premium dollars.

You touched on it—back in the day satellites didn't exist. Or if they did, they weren't around where they worked. Innovation and technology. Obviously significant advances over almost sixty years. What have you seen, and is the accuracy today, because of that, greater?

No question, the accuracy has increased, continues to increase. We're in a technologically driven world, a digital world. We’re in a period of accelerating progress, accelerating information. Information is doubling every few years—at some point in the next ten years, it will double every week. So we're in the age of accelerating technology, and meteorology and weather forecasting, obviously, is part of that—in some ways, has led it.

And as the book, The Signal and the Noise, showed, the greatest advances in weather forecasting—of any field of prediction—the greatest advances were in the field of weather forecasts. And obviously, we've been part of it, and in some areas, we've led it. And certainly we've done more to create public support for the funding and what's needed for this whole enterprise.

But yes: forecasts have improved, they have increased. We've played a major role in making some of that happen. But more than that, it's the impact of the weather, explaining it, so people make the right decision. If the forecast is accurate, but it's not communicated correctly, or it's not there in time, or it's misunderstood, you're not going to get the savings. So we're an expert in that too. That's where it’s at least as important.

Somebody else may get the forecast right, but people didn't know it, didn't hear it. With Hurricane Katrina, we were on every network, because we had an amazing forecast that was far more dramatic than anybody else. We said—this was three days in advance of Katrina hitting, we said, “50 to 80% of the city of New Orleans will be underwater for days or weeks.” Right up to the evening before Katrina hit, Max Mayfield, the head of the National Hurricane Center briefed President Bush, quote, “There will be minimal damage in the city of New Orleans; ignore these reports you're seeing on television.”

These reports on television were interviews we were doing on Fox and the ABC national news, CNN and so on. With this quote, and we followed by saying, “We know what it is to cry wolf—we’re not crying wolf. We’re staking our reputation on this.” Of course, we were right. There are times when you have to make these kinds of decisions. And we were cited by Congress. We believe we saved over 10,000 lives in and around New Orleans with that forecast, because it was far more dramatic than anybody else, and a lot of people evacuated the city because of it.

First off, it's incredible. Hindsight is 20/20 and you were correct. Leading up to that, like anything else, there's risk/reward. And your risk is your reputation. With nobody else crying wolf: Did you give pause? At any point did you say, “You know what, I'm not sure I should pull the trigger on this?”

Well, each decision is individually based on all the patterns and based on all things involved. We didn't do it lightly, and so I wouldn't say “pause.” We believed in it, we understood what we were basing it on—there was thorough discussion by a team. This wasn't just one person running out and doing that, and that's part of the key as well in making the best decisions possible. Are we always right? No. Are we more accurate—significantly—than anybody else? Yes. And we're proud of it.

So talk about your people because other companies—although you're the biggest and the best, and you've been around the longest—there's other competition that have access to the same satellites and weather maps. Yet, you continue to be superior in terms of your accuracy. What's the secret sauce? Is it the people? What is it?

It's all of it. We bring in more weather data and weather models to our facility in State College, Pennsylvania, our global headquarters, than any other place on the planet. We got our first computer system in 1979, and the IT people were hand-in-hand with the forecasters. We keep evolving the system so the forecasters have all the algorithms that manipulate the data—hey, I could spend the next hour talking about how we do that, and AI, and the best of the forecasters, and the best of the models, to make sure that each parameter for each place is maximized in terms of accuracy.

But you need dedicated people. What we have is the best that we can get out of the machinery and the programs and the computers, and the best forecasters in the world, working together. I mean, I’d put our forecast team against any other—the National Hurricane Center and so on. And the same—our tornado and severe weather forecast team out in Wichita, Kansas. These are specialty groups that are amazing—but they work together as a team, and they've been around a long time, and they keep working together. Dan Kottlowski, who heads up our hurricane forecasting team, I hired out of school after he was done at Purdue. You've got the Penn Staters—a lot of our meteorologists are Penn Staters—and they weren't even a member of the Big Ten then, but I mean, Penn State wasn't.

But a lot of longevity, a lot of gaining experience. I mean, going to conferences and constantly improving ourselves. But the team, the teamwork, I mean, we have dozens of forecasters who’ve been with us for more than 20 years.

I know you hired a lot of your students from Penn State. The best students you had, you hired, right?

Yes indeed. I seeded the company in the early days with the very best students and put them together as a team. And I found out by teaching—you know, I taught the forecasting course—and we’d have a class of 40 students, and I’d give them an exercise each day, and they’d forecast. I had a scoring system, a verification system—you have to be able to measure this—and so at the end of the semester, the best student might have 300 errors, as it was calculated, and the worst had 1,400. But I found if you averaged the forecasts each day of the ninth and tenth forecaster out of 40, that average would beat the number one forecaster.

So what I did was hire the very best ones—and by the way, if they beat me, they got an automatic A or excused from the final. And I had about 15 students over 21 years—talk probably about 750 students over that period of time—who beat me. And some of those got job offers—that’s how we built AccuWeather. But taking these great forecasters and putting them together as a team and having them collaborate: actually, not just averaging a forecast, but working it out through a civil argument, if you will—you're going to get the very best.

And you’re also going to see what the government's predicting, and so on. We expect the low to be 20, and they're predicting 30, and all the models—and there's a lot of reasons why others are going to predict the 29 or 30—we may not predict 20. We may predict 23 or 24 to ensure we're going to win, because nothing's for certain till it happens.

If it's 20 we win, if it's 25, we win and so on. So there's all types of strategies involved in that as well.

Well, you're talking about people. And successful businesses also have a unique and special culture. Tell our audience about ICE. What does ICE mean?

Innovation, creativity, and entrepreneurship. That's what the company is all about. That's what we hire people who either have—already have that mindset—or can be developed to have that mindset. People who have an open mind, the right attitude, and will be with us for the long term and will fit into our culture and contribute to our mission. And that's what we're all about.

Everybody can't. But those that can and have, have been successful, and we're proud of the fact that we have dozens of people that we hired out of college and are still with us and will retire. Many have already spent their entire lives working for AccuWeather, working for me.

Before COVID hit, the year before that, I gave three retirement dinners to three people who I hired out of Penn State—Elliott Abrams, 52 years at AccuWeather; Jim Candor, 39; Ken Clark, nearly 45 years. These were people that spent their entire career just working for AccuWeather, working for me. I'm proud of that. And as I said, we have dozens more coming along that have been with us for 25, 30, 35, 40 and more years.

You've built not only a special culture, but you've developed some of the best in the business, and you have a loyal following.

When I think of entrepreneurs, I think of risk takers. I don't think of people that are cavalier, but you know what, there's times when you've had to take risks. Are there any particular risks that you had to take, or were you ever at the crossroads where you had to balance risk versus reward over the years?

I think we do that every day, I mean, on all types of levels of decisions, small, medium, and large. You do it when you hire somebody. You do it when you promote somebody. You do it on a daily basis in making weather forecasts or business decisions. I think judgment is key in a successful business, and it may come with experience, but you have to have good judgment. You can't be perfect—perfect is the enemy of progress. You're going to make mistakes. Acknowledge and try and learn from them, and move on.

The key to success is improvement, and I preach this—whether it's in your personal life, in your workout, in your diet, in your relationships, in your business—try and improve. Coach Joe Paterno said it well: You’re either moving forward or moving backward. It's hard to balance that exact line, and never change—it's almost impossible. And of course, if you know calculus, it is impossible. You’re either going above it or below it.

I make this point: Compounding, as Einstein said, is the eighth wonder of the world. You've all heard the story, if you take a penny, and you can double it each day, you have two cents, four, eight, 16, 32, 64, 128, 256, 512, 1024, and so on. And at the end of 31 days, you have $11 million from one cent. So if you can improve some aspect of your life by 1% each day for 365 days—1% a day, 365 days—at the end of the year, you'll be 38.2 times as great as you were in the beginning. 38 times as great. On the other hand, if you slip 1% a day, from the beginning to the end of the year, you'll only be 3% of what you were in the beginning. And the difference between improving 1% a day and slipping 1% a day—that ratio is 1,240 to one.

And that I think explains why some people are hugely successful, some people moderately successful, and some people unfortunately, don't progress very much. We're all capable of accomplishing a lot. The key is, know what you want. Follow your dream. Keep it in focus. And don't quit, don't quit, don't quit.

I’m mesmerized by those comments. You're a tremendous leader. Congratulations. So let me ask you this, Joel: What's next for AccuWeather?

Well, constant innovation and creativity. I come to work every day excited—actually, I can't say “come to work” because work never stops. I'm thinking about when I wake up in the morning, and when I fall asleep at night, and that's what entrepreneurs do. There's always another idea, a new creation, a refinement to something that suddenly you can make better, whether it's in marketing, whether it's in the product, whether it's the people, or the benefits, or whatever. You just have to keep working at it. It's a work in progress.

Let's end on a more light note here. I know you're a huge Penn State football fan. I think you told me at one time that you didn't miss a home game for like fifty years until COVID hit—is that right?

No, no, no. These stories get exaggerated. No, since I arrived on campus as a sophomore—I went to the Abington campus north of Philadelphia the first year—so I was a sophomore in 1958. I've missed seven home games over that period of time.

I also understand that there's times when you used to talk to Coach Paterno, and now Franklin, about weather. Any particular stories about how weather impacted a game, and how your forecast changed play selection?

I started giving Joe forecasts I think when he was still assistant to Rip Engle, and kept that tradition right along.

Well Joe always told the story of what happened in Maryland in 1969. I told him the weather would be okay, and there was a hurricane off the coast, but I expected it to go out to sea. He was in Maryland—they were playing in Maryland, and I checked the weather Friday evening after dinner, maybe about 10:00, 10:30, and said “Geez, looks like the hurricane’s coming up the coast. And that would mean it would be rainy and windy at Maryland, and he was not expecting any of that—expecting a little wind, how can I get a hold of him?”

I tracked him down in a motel—he and the team in a motel outside of Baltimore, and I woke him up, probably about 11:30. And told him, I said, “Sorry to disturb you Joe, but I figured you'd want to know.” Around 3:00am, the hurricane took a sharp turn and went out to sea.

So the day—clear blue skies, no rain. It was windy, but that was about it. And he never let me forget it. He told the story, he said, “I never slept again that night.” He was up replaying the entire game in his head, based on the fact it was going to be wet, soggy, and so on. He told that story over and over again.

So you know, you make a mistake. You live with it, you can get a thousand forecasts correct, but I'm always cognizant of that—you don't want to make that mistake, because you want to do the best you can to be accurate every day. But you can't be in this business, but you try very hard. Joe must have told that story every time we were in a public place together, he must have told that story a dozen times.

Well, I asked you to tell a story, and you tell the one story where there was a mistake made. So that tells me in addition to all the other great things you're about, you're also humble.

That's a great story, and a nice note to end on Joel. I want to thank you for joining me today. And to our listeners: Thank you too, for tuning in. And if you want to learn more about AccuWeather and I really suggest that you do, please visit accuweather.com. Until next time, I'm Mike Mitchell, and this is Risk Playbook.