Immigrant Entrepreneurs: Chris and Natasha Ashton | Business: Petplan | Country of Origin: U.K. | Emigrated to U.S.: 2003 | Launched Petplan USA: 2003 | Annual revenue: $40 million | Jobs created: 75
A big bill for their beloved cat’s medical care inspires two young immigrants to create a brand new market in the U.S.
When Chris and Natasha Ashton brought their sick cat, Bodey, to a veterinary hospital at the University of Pennsylvania, they were shocked to walk away with a $5,000 bill. The couple had been studying entrepreneurship while earning MBAs at The Wharton School of Business, University of Pennsylvania. Thanks to their ability, to look at the American marketplace through an immigrant’s perspective the Ashtons spotted a new business opportunity.
In Britain, the married couple’s native country, about 25% of cats and dogs have health insurance. But they found out that in the U.S., less than 1% did. And so Petplan USA, a pet health insurance company for the U.S., was born. Today the ten year-old business generates $40 million in annual sales and has 100,000 customers.
Here is how the Ashtons—who arrived in the U.S. with four suitcases and a cat—did it.
Do the research.
Neither of the Ashtons had experience in the pet insurance business when they got started. Chris, now 39, had been a captain in the Royal Marine Commandos, while Natasha, 38, had run a small wedding-favors manufacturing firm in the U.K. To learn their new field, they devoted their time at Wharton to researching the U.S. pet insurance industry, consulting with veterinary experts they met through professors and other advisors at the school. They gradually wrote a business plan for an American pet insurance company—which won the Wharton Business Plan Competition in 2003.
You can’t just sit back and expect things to get done for you. – Chris Ashton, Petplan USA
Form an Advisory Board.
It will give you credibility and access to a business culture that may take you years to crack otherwise.
Serious about turning their plan into a real business, the Ashtons recruited a board of advisorsthat included a roster of experienced industry veterans, such as Ken Drobatz, a professor of critical care emergency services at the Matthew J. Ryan Veterinary Hospital at the University of Pennsylvania.
The Ashtons did this by aggressively tapping contacts at the school, making sure to attend campus events where they would have a chance to meet successful entrepreneurs and business leaders, and reaching out to experts they had met in caring for their own pets. And you have to be aggressive about it. “You can’t just sit back and expect things to get done for you,” says Chris. “We had to work very hard at getting out there and networking.”
For foreigners, it is especially important to look for board members who understand the intricacies of doing business in your field in the U.S., says Natasha: “Find a U.S. citizen who understands the ins and outs,” she says.
Use Your Foreign Advantage.
That means use contacts, suppliers and knowledge fromback home. In this case the Ashtons partnered with a pet insurance company from the U.K. The partnership gave the Ashtons the infrastructure and credibility to get established quickly.
The Ashtons’ work on the business plan turned out to be the easy part. To establish themselves quickly, they decided to try to license the name of Petplan U.K., a pet insurance company owned by Allianz PLC that had insured their own pets in Britain.
Without an “in” with the British company, they resorted to a time-honored entrepreneurial strategy: cold calling until they were able to secure a meeting to present their business plan to the executives at Petplan U.K.
The plan was a hit, thanks to their months of painstaking efforts to understand the demographic nuances and opportunities in the U.S. “They knew we’d done our homework,” says Chris. The executives referred the proposal to Petplan U.K.’s board of directors, who ultimately approved it. After six months of negotiation, the couple won the right to call their Philadelphia-based business Petplan USA. They incorporated in 2003.
For foreigners, it is especially important to look for board members who understand the intricacies of doing business in your field in the U.S. – Natasha Ashton, Petplan USA
Understand how the U.S. works before launching your business.
It sounds obvious, but remember the U.S. is made up of 50 states. Each has its own laws and regulations on how to do business.
Petplan USA couldn’t start selling insurance plans right away. The Ashtons learned that U.S. law required the company to get a license for the business in every state where it wanted to operate. The couple spent two arduous years securing licenses in all 50 states. “Every state has its own weird and wonderful rules,” says Chris.
They also had to find an underwriter for their policies. “We must have presented to 50 different insurance companies before we ended up with our underwriters,” recalls Natasha. Their hard work paid off. They now have two A+ underwriters: American National Property and Casualty Co. in Springfield, Mo., and a division of Swiss Re. “I think our partnership with Petplan UK gave us credibility, even though it wasn’t an American company,” says Chris.
Make Sure You Have a Competitive Advantage.
There’s no point in replicating what’s already available and then trying to compete on price. Your American competitors already have market presence, distribution channels and established relationships with buyers. You need to offer something different—and better.
The Ashtons’ affiliation with Petplan fortunately helped them get off to a strong start once they started selling insurance. “The biggest problem with pet insurance in the U.S. is that most companies refuse to cover the kind of hereditary conditions that pure-bred dogs inherit, such as hip dysplasia, orthopedic diseases and cancer,” says Natasha. The couple recognized that by covering such ailments, as Petplan UK did, they would have a competitive advantage.
Don’t Be Arrogant.
If you have a partner company, ask for advice and counsel. Even though the company may have never done business in the U.S., they’ll have resources, experience and business insights that are transferable to the American market.
By using 30 years’ worth of data from the British company, the Ashtons developed premiums based on a pet’s species and zip code, an indicator of local veterinary costs. In consultation with Petplan UK, they settled on a pricing structure in which the average premium is now $300 a year, but gives subscribers a choice of deductibles. “Being able to call Petplan and have an expert answer any question is a tremendous advantage,” says Natasha. “It allowed us to avoid some of the mistakes we might have made.” Petplan even sent its chief of claims to the U.S. to work one-on-one with the Ashtons for six months. “It allowed us to be far more nimble in the marketplace,” says Natasha.
Create a Business, Employ Americans, and Sponsor Yourself for a Green Card.
The couple, who had arrived on student visas in 2001, had to deal with the time-consuming bureaucratic realities of immigrating as they built the business. After their student visas expired, they decided to apply for H1B visas and, later, green cards, both sponsored by their own company. Sponsoring themselves was an unusual approach, but an effective one. “It was all based on the company being a genuine business that was employing Americans and paying taxes,”says Chris. The couple received their green cards in 2009.
When we look at what we do on a daily basis, it’s very worthwhile. We’re literally saving lives. – Natasha Ashton, Petplan USA
Don’t Struggle with Minutiae—Constantly Look to Evolve Your Business to the Next Level.
About a year after Petplan USA began selling policies, Chris suffered an accidental fall from a window at his house that resulted in a shattered ankle, broken ribs, and blood clots. “He was bedridden for six months,” recalls Natasha. To keep the business running, Natasha ran operations from their office, while Chris watched their then five-month-old baby and worked on business development.
“We believe the accident was one of the best things to happen to the business,” says Natasha. “It allowed Chris to get out of the minutiae and think about strategy.” It was during his recuperation period that they began formulating more aggressive growth plans for the company and approached Vernon Hill, who founded Commerce Bank and led it until it was sold for $8.5 billion, for advice. They had met him at Wharton years earlier, on a day when he was speaking at a student program. “He’s passionate about pets and crazy about his own dog, Duffy,” says Chris. Hill liked their idea and in 2008 became president of the chairman of the board, leading a round of venture capital funding that attracted a group of European investors.
Be Fulfilled in What You Do.
There’s nothing worse than going through the trials and tribulations of creating a business to only find that you’ve created a meaningless drone job for yourself. With some major hurdles behind them, the couple says Petplan USA has achieved double-digit sales growth for the past few years. “The economy has really fueled our sales growth,” says Natasha. “We’ve seen double-digit growth over the last few years.”
Beyond that, the pet-loving couple says their efforts have been personally fulfilling. “Ultimately, you go through many obstacles to get a business up and running,” says Natasha. “When we look at what we do on a daily basis, it’s very worthwhile. We’re literally saving lives.”