EMBRACE PET INSURANCE A Lesson in Persistence Bruce R. Barringer Oklahoma State University R. Duane Ireland Texas A & M University JOEY 陳清水 MA1N0207 JACK 阮陳福 MA1N0214 HUNG 黎阮維雄 MA1N0204 AARON 林志聰 MA1N0237

Agenda Case study Discuss questions  Question 1  Question 2  Question 3 Application questions  Question 1  Question 2

Case Summary  2003, L. Bennett, A. Krooglik and two classmates won the prestigious Wharton Business Plan Competition.  PAWS Pet Health Insurance, a plan based on the idea of providing health insurance for dogs and cats.  Forming a Real Business Determine price fair and reasonable Find a partner – an insurance company that would take the risk Partner with Lloyds of London Differentiate itself by offering high service quality

Discuss Questions

Question 1 What extent do L. Bennett and A. Krooglik’s founding and development of Embrace Pet Insurance reflect each of these characteristics?

Question 1 (cont.)  Passion for the business -Pet insurance in the US : consumers had very limited choices for coverage => need a solution => a business idea coming up -Winning the competition => this is absolutely a good idea + financial support  Product/customer focus -Passionate advocates for fair and reasonably priced pet insurance -Don’t follow lower premiums strategy but restrict pet care and further limit reimbursements => focus on service quality “How a company treats its members when they file a claim is the true test of a pet insurance company” “How a company treats its members when they file a claim is the true test of a pet insurance company”

Question 1 (cont.)  Execution Intelligence -Offering customized insurance – offering numerous choices for coverage versus premium and deductible -Calculating its reimbursements on whether a member’s vet charged a “reasonable and customary” fee rather than on a set reimbursement schedule => Embrace differs itself from most pet insurance companies  Tenacity despite failure -After the deal with the insurance company was off => they felt despondent, didn’t know where to turn for several days => discussed, regrouped and started seeking out other possibilities

Question 1 (cont.)  The ability to learn and iterate  Every idea for a business counts, for Embrace, they have experience a bad start with almost everything that they think they have to do, but as soon as they learn that the path (finance company, accounting ) that they are taking is no longer a choice, they created a new path, which lead them to a good beginning. Their cat got sick $5,000 No choice to avoid $5,000 $25-$50 / month

Question 2  We believe that Embrace Pet Insurance’s basic business idea “adds value” to the lives of its customers, because American people treats their pets as their sons or daughters and Embrace provides American people a good quality pet health insurance with reasonable price and flexible choices for coverage.  Those American older people will be the potential customers, because Tend to spend more on their pets-and the population was aging. Consumers had limited choices for good quality pet insurance at that time US market ( million), but should be 6 billion (7 million dogs and 90 million cats with less than 0.5% of those insecure + 2/3 of US household had a dog or a cat)

Question 3 Insurance Company JumpStart Non profit venture fund Lloyds bank Insurance company did not want to take the high risks (out of their field) The occasions in the development of Embrace Pet Insurance in which Bennett and Krooglik’s tenacity and resolve to make the business work were tested the most

Question 3 (cont.) Determining the most reasonable price, they tried to find companies that sells pet insurances, unfortunately the task is never easy. Other reasons will include the consumers data privacy. In each stone rejected, they finally found a source, they are enable to convince a vet clinic to let the access they’re pricing data. Finding a well financed insurance company to take on the financial aspect of they’re business. This time Bennett really broke down, they are finding difficulties to find a firm that will support they’re business, it took them one year to find Jumpstart (a non-profit venture fund) and later they found Lloyds of London both as a business partner and a friend. Advocates for fair and reasonably priced pet insurance => “Premium brand” good service quality without any restrict pet care or further limit reimbursements => making the difference with all competitors

Question 4 Embrace's Core Values ??? => Golden Rule: “Customer is always right” As a business, wowing a customer is the first priority, for Embrace company, they provide customer with right satisfactory and give them more than they expect.

Question 4 (cont.)  Focus on customer care Share a personal responsibility to maintain our pet parents' loyalty & trust You have the right to a 30-day money-back guarantee  If they did not use insurance, they can get back money

APPLICATION QUESTIONS

National Chengchi University (NCCU) IMBA Business Plan Competition how to help other entrepreneurs and boost this spirit around the island? Conducting a Business Plan Workshop where participants could structure their ventures and learn best practices to make those ideas come true Business Plan Boot Camp: training the participants to create systematic thinking habits and through evidence-based business planning in a 10 weeks of hands-on workshop => tackling a real world problem Business Plan Competition: provided valuable feedback by the judges, faced off for a chance to win prizes totaling up to NTD 180,000 What started off as a dream, has finally come true. It has been a long journey, however, looking back, it has well been worth the effort !!!

Networking Opportunities An attractive benefit for certain inexperienced entrepreneurs lack not only the finance but also the presence, credibility and networking capabilities of more experienced mentors Network with teammates, professors, judges and other entrepreneurs Working Towards Goals If you don’t hit your numbers this month, you can easily adjust them for next month. However, when you’re presenting and competing, those goals have to be set in stone Multiple Points of Feedback The insight provided by judges of business plan competitions => great value Enriching experience and ensures that the foundations of the plan are grounded in reality Question 1

Do you think Embrace Pet Insurance would exist if they had not entered an early version of Embrace’s business plan into their college’s business plan competition ??? Question 1 (cont.)

Successful Entrepreneurship Is Not About Winning A Popularity Contest With Venture Capitalists Successful Entrepreneurship Is Not About Winning A Popularity Contest With Venture Capitalists Question 1 (cont.)

Question 2 My most passionate area: AUTOMOBILE INDUSTRY

Automobile Industry in Vietnam  Facts and figures: Vietnam’s GDP per capita (nominal) is nearly USD in 2013 while Indonesia, Thailand are around USD and USD in 2013 respectively. (Source: retrieved from IMF website) However, car prices in Vietnam are so expensive compared to other countries due to an undeveloped automobile industry and high taxes. Although automobile industry has been started since Question 2 (cont.)

With below USD, Vietnamese can not buy any new car but and Indonesian will have so many choices. Thailand also give more options for their customer with eco-cars which have the price below USD. Even in Cambodia, they just released “made in Cambodia” electric car in February 2014 with the price ranging from USD to USD Automobile Industry in Vietnam Question 2 (cont.)

Automobile Industry in Vietnam  My ideas: I want to create “Made in Vietnam” cheap car for Vietnamese It could be small size internal-combustion-engine-car or electric-car with the price around USD I could corporate with some enthusiastic professors from universities in Vietnam or other countries trying to build the model with high localization rate for parts of the car in order to reduce the price. Then we can continue to corporate with producers to develop the model into the real products and distribute them into the market. Question 2 (cont.)

Automobile Industry in Vietnam  Challenges Our supporting industry is still weak so it is hard to have a high localization rate automobile industry We also need to develop infrastructure (for example, building charging station) if we have electric cars. We need to compete with products from other countries when the import tax for cars in South East Asia countries will become 0% starting from 2018 due to AFTA trading rule.. Question 2 (cont.)