Managing Growth at a Pet-Insurance Business

A nasty accident forced Petplan's frazzled young founders to bring on an experienced partner and put a long-term growth strategy in place

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The Entrepreneurs: Chris Ashton, 36, and Natasha Ashton, 34

Background: The British-born married couple moved to the U.S. in 2001 to attend the The Wharton School at the University of Pennsylvania. Shortly after enrolling, their cat, Bodey, became sick. The ensuing $5,000 vet bill forced the couple to move to a smaller apartment and prompted them to look for pet insurance. Their search did not prove fruitful. Even though the pet products industry was booming, pet insurance was practically nonexistent. The Ashtons thought the few available insurance products were overly complicated and restrictive, so they put their business degrees to use and started their own company to fill the gap.

The Company: Following their graduation, in July 2006, the Ashtons launched Petplan Pet Insurance in the U.S. with coverage for all hereditary conditions for the life of an insured pet. Petplan now insures tens of thousands of pets across the country.

Revenues: Estimated $15 million for 2009

Their Story: Anyone who's ever had a pet knows that accidents happen. Take one of our client's dogs, Cooper, an 8-month-old lab, that ran head-first into a mailbox while chasing a Frisbee. He fractured two of his vertebrae, landing him in the ER and his owners with a $12,000 veterinary bill. Luckily, Cooper made a full recovery and we picked up the tab.

As a pet health-insurance provider, we are in the accident business. And it was accident, though of a different sort, that made us change our management and operations strategies to be able to handle growth.

A year after launching our company, Chris shattered his ankle and broke two ribs. He endured several surgeries and six months of rehabilitation before he walked again. Complications from blood clots sent him back to the hospital twice.

This accident could not have come at a more critical time in our business' short history. Demand for pet insurance was huge. By July 2007 we were seeing double-digit growth each month. We were selling policies nationwide, and we needed to expand our operations to accommodate the growth. Though we had built a strong team of 10, like many entrepreneurs, we had trouble delegating responsibility to enable us to push the business forward rather than just focus on the day-to-day tasks. After the accident, our hand was forced: We had to create more structure to enable our team to function in our absence.

It was incredibly difficult at first. Chris and I were both hands-on managers. We were used to being in the office, doing everything from designing and marketing our products, to answering the phones and stuffing envelopes, to recruiting. There were many late nights where we would sit on the floor surrounded by hundreds of policies and completed claims that had to be collated and mailed. Often we would work through the night to make sure that everything got out. With policy sales and call volumes increasing at a rapid rate, we were so immersed in the doing that we became further and further removed from the strategic vision that fueled our early growth.

Major Achievement

Chris' accident really forced us to rethink the company's organizational structure. For two (British) kids straight out of business school, with no experience of living or working in the U.S. and no experience in the insurance industry, let alone pet insurance, we had achieved a great deal. For instance, the Humane Society of the United States selected us as their exclusive pet health-insurance provider.

Landing such a renowned client prompted us to seek clients of similar caliber, to build the strongest foundation possible for our business. And although we also had a number of strong external business partnerships, the accident prompted us to realize we couldn't do it all ourselves. We needed an internal partner who would help us refocus on the bigger picture to continue to drive growth.

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