Each year the Wharton School of Business at the University of Pennsylvania hosts a business plan competition, where student teams compete for a $20,000 grand prize and, more important, attention of the more than 300 venture capitalists and business leaders who attend the awards program. The year-long Wharton competition, known widely as the Olympics of business plan competitions, is one place where you are highly likely to see tomorrow's most successful business models before anyone else does.

So what business concept most impressed the all-star judges from Business 2.0 magazine, Flagship Ventures, Flatiron Partners, Goldman Sachs and Johnson & Johnson, among others? Did it have to do with IT, life sciences, telecommunications, Internet applications, alternative energy?

Although business plans were submitted in each of those categories, this year's winning plan aims at providing better accident and health insurance for your pets. Team leader Chris Ashton, who put together the winning plan for PAWS Pet Health Insurance with his wife, Natasha, and fellow students Alex Krooglik and Laura Bennett, says they owe it all to the Ashtons' cat, a Birman named Bodey. Shortly after the Ashtons arrived in the United States from England to study at Wharton, Bodey became very ill, and the financially strapped student couple was forced to shell out more than $5,000 in veterinary bills.

"We were very surprised to find out how little pet insurance there was in this country," recalls Chris, who points out that in the United Kingdom, there are more than 60 insurance companies providing coverage for about 10 percent of the country's 14 million dogs, cats and other domesticated animals. "In the United States, there are 10 times as many pets," Ashton says, "yet there are only four insurance companies providing coverage to less than one-half of 1 percent of that population."

By collecting veterinary data and conducting extensive market research with pet owners, the team concluded that current pet insurance policies were inadequate, so they decided to create some innovative products of their own, using team member (and insurance actuary) Bennett's actuarial talent to crunch the numbers. The team (which has not yet decided on a name for the company) has already been approached by investors, but Chris says he would prefer to negotiate an underwriting agreement or form a strategic alliance with an established insurance firm to grow the business.

Some of the runners up, who shared more than $25,000 in prize money, were:

  • Air in Motion, a "wind farm" franchised business that proposes to market carbon credits from the operation of its franchisees' windmills;
  • BioGenomix, which developed a breakthrough Platelet Delivery System that "supercharges" platelets in the blood stream and makes them more effective in treating wounds and infections;
  • FerroSolutions, which developed an energy harvester to capture vibrations from the local environment and convert it into usable electric energy; and
  • JMesh Technologies, a designer of mesh networking equipment for wireless Internet devices.

So what was the key to the pet insurance team's success that will help you build a better business plan? Full disclosure. I was not a judge, nor did I interview any of the Wharton competition judges for this column; I have, however, had the pleasure of judging other business plan competitions and can see a couple of elements in the pet insurance plan that may have impressed the judges:

  • The plan was based on the actual experience of the company founders, specifically their frustration at the lack of adequate pet insurance in the United States. If you do not understand your market and have not personally "felt their pain," you haven't a prayer of serving their needs adequately.
  • The plan addressed a potentially huge market that is underserved and has plenty of room to grow.
  • The market was thoroughly researched, and exhaustive data collected from both pet owners and veterinarians, to develop alternatives to existing pet insurance products.
  • The management team possessed a detailed "inside knowledge" of the business (for example, the pet insurance products already available in the United Kingdom) that was not generally available to the industry.
  • The team exploited the peculiar talents of its members (specifically, the actuarial skills of team member Bennett) to build credibility.

Summaries of all the business plans submitted, along with contact information for the team leaders, can be found at www.whartonbpc.com.


Cliff Ennico is host of the PBS television series MoneyHunt and a leading expert on managing growing companies. His advice for small businesses regularly appears on the "Protecting Your Business" channel on the Small Business Television Network at www.sbtv.com. E-mail him at cennico@legalcareer.com.